Opinions
Brendan Caldwell
Sherritt International Corp.
S-T
COMMENT
Nov 13, 2017
$1.470
Stock price when the opinion was issued
integrated mines
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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
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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integrated mines
A big international mining company. You have to assume electric cars going forward are all they are hyped up to be. You also have to assume S-T is going to be a major beneficiary. There has been and continues to be stronger demand for base metals that they dig out of the ground all over the world, which provides diversification and they could also be subject to political risk.