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Opinions Benj Gallander
Sherritt International Corp.S.TODON'T BUYMay 22, 2018
$1.22
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.
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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
He has followed this stock for years. On the good side, it has reduced its debt load. He doesn’t have a lot of belief in the management. They are working on a product that will make it possible to move more oil in a pipeline, but he is not confident that the management will exploit this successfully.