Little Downside Priced Into Sims' Inflated Share Price
No-moat-rated Sims Metal Management's share price has come off in recent weeks, sliding more than 13% from June highs of nearly AUD 18.00. We think there is more to come. Now trading at AUD 15.58, shares in Sims still trade at a lofty 54% premium to our unchanged fair value estimate of AUD 10.10. We believe the market is overestimating the sustainability of steel demand within China, as well as the price of ferrous scrap metal.We still expect Chinese mills to increase their ferrous scrap consum...
Sims Metal Management buys, processes and sells ferrous and non-ferrous recycled metals and provides environmentally responsible solutions for the disposal of post-consumer electronic products, including information technology assets recycled for commercial customers. Co.'s product groups are: ferrous secondary recycling, which collects, processes and trades iron and steel secondary raw material; non-ferrous secondary recycling, which collects, processes and trades other metal alloys and residues; recycling solutions, which disposes post-consumer electronic products; and secondary processing and other services, which focuses on melting, refining and ingoting of certain non-ferrous metals.
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