Stock price when the opinion was issued
He is suspect of this company. Had tried to Short it, but was late. It had a massive rally, but is still down from the beginning of the year. He just doesn’t see going in now. They have 2 businesses. One is commodity trading that has very thin margins. They need to have a very good credit rating in order to maintain that. They have a mining business that they bought at the top of the cycle. It is difficult to see how they can maintain their credit rating while the mining cycle turns down and the commodity price falls. Has a large amount of debt.
It has not been without its volatility. They deleveraged in Jan/Feb this year. They continued deleveraging and if you look at them now they are one of the more unique global diversified resource plays. They are trying to conserve cash, pay off debt and sell non-core assets.