Peter HodsonAur ResourcesAUR.TOWEAK BUYJul 26, 2005
Basically a copper play. Street doesn't like the management team. Had a failed merger attempt a year or so ago. With high copper prices, earnings will continue, but they have a short reserve life. With a different management team the stock would probably be $3/4 higher, but management is entrenched and need to buy another asset to get the growth profile going.
Numbers were a little bit below expectations. Adding acquisitions. Extremely strong balance sheet. Feels it can trade back up in the mid-$20's. Could be a takeout.
It is facing the rapid decline in copper prices. You will probably see some element of earnings being reduced. Seems to be holding here reasonably well. If you’re reasonably optimistic, like he is, some of the metals are looking a little more interesting.
Paying a special dividend towards the end of the month. Outlook for copper is a little more guarded at this stage. If there is a re-acceleration of the economy, the stock can spring back to life and trade in the mid-$20's. Would take a little money off the table at that time.