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Opinions Don Vialoux
Sherritt International Corp.S.TODON'T BUYOct 11, 2013
Don VialouxUnknown
$3.49
Stock price when the opinion was issued
$0.12
As of May 19, 2026. Market Open.
integrated mines
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RISKY
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research
It is certainly not beyond possibility. Bloomberg default ratio is 7.36%, which is very high for that indicator. Cash flow was negative in the last quarter, yet 12-month interest expenses were $36.1M net. With its small size and Cuban and other issues, we are not sure it could raise a lot of money with a dilutive equity issue. Most debt matures in 2026. Certainly any investment here needs to be considered extremely risky.
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DON'T BUY
This is a zero, although not priced there yet. That is where it is going. It has been a lousy company for a long time. Madagascar will prove to be their undoing. They defaulted on their debt in February. Their debt is currently worth 54 cents on the dollar so the stock is worth zero.
integrated mines
COMMENT
The share price keeps falling. Why? The biggest thing recently is in Cuba where they have assets and deal with the government to repatriate cash flow, not related to that quarter's cash flow. A quarter ago, Cuba didn't pay. Two weeks ago, they announced a solution, a deal with the Cuban government which is cash-strapped, especially as it deals with the costs of hurricanes that have hit Cuba. Cuba has to pay or else it will scare off other Western companies.
integrated mines
COMMENT
Cobalt is a partner commodity in the production of lithium batteries. Earnings are expected to be negative in 2019. Cobalt prices have risen sharply, causing manufacturers to find a way to move away from using it -- nickle may replace it (as an aside Sherritt could be a potential benefactor of this). He would consider selling FCC-V in favour of XBC-V (who focuses on garbage dump gas extraction).
integrated mines
Historically this normally has positive seasonal strength from around the middle of November right through until April of each year. What is driving it right now is the new nickel facility. If they get that going, it could be a big bonus for them. However, technically it is 1) in a downward trend, 2) underperforming the Canadian market and 3) trading below its 20 day moving average. Not a good situation right now.