Opinions

Ross Healy Sherritt International Corp. S-T DON'T BUY Dec 04, 2019

It's trading as if the market thinks its balance sheet will disappear--sell-off. Avoid this.

Ross Healy

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$0.190

Stock price when the opinion was issued

integrated mines

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DON'T BUY

He does not look at stocks trading at this level. This stock could go anywhere. He predicts it goes down.

DON'T BUY

There is evidence of a bottom developing but he thinks we are in a world where growth is slowing. You need a robust economy to invest here, but it may be tradable. The story over 5 years is down.

DON'T BUY

He's looking at their bonds. They're misunderstood. They've struggled badly this year as Trump pressure countries like Cuba and Venezuela where Sherritt has interests. Also, the company has a lot of debt to pay.

COMMENT

Historically owned bonds. If the trend for nickel continues, it will do well.

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.

WEAK BUY

Getting to the right theme is the most important thing. Has a good basket of assets. Recently pulled back. It's a small cap, so you have to be careful. But it should continue to participate as long as base materials continue to improve.

DON'T BUY

Transformed company from 4-5 years ago. Not a good investment. Looking elsewhere. 96% retail ownership implies speculative asset. Tough business to operate in (mining). Consistently losing money.

DON'T BUY

Always highly leveraged on risk/reward. Geopolitical risk of Cuba. Nothing compelling in terms of nickel or cobalt options, there are better choices. No dividend.

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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Ross Healy Sherritt International Corp. S-T DON'T BUY Dec 04, 2019

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