Sell-Off in Base Metals and Coal now Sees South32 Close to Fairly Valued
After peaking at around AUD 4.25 per share in October 2018, no-moat South32 shares have sold off by almost one fourth. The price pullback means the shares are now close to fairly valued. This is despite reducing our fair value estimate slightly to AUD 3.00 per share from AUD 3.10 previously. The reduction primarily reflects declines in the spot prices for nickel and zinc. The lower AUD/USD exchange rate, below 0.70, is a partial offset. The base metals and manganese price sell-off is the key rea...South32 is engaged in mining and metal production from a portfolio of assets for the commodities of alumina, aluminium, bauxite, energy and metallurgical coal, manganese ore, manganese alloy, nickel, silver, lead and zinc. As of June 30 2016, Co. operated 10 segments, which were comprised of: Worsley Alumina, South Africa Aluminium, Brazil Alumina, Mozal Aluminium, South Africa Energy Coal, Illawarra Metallurgical Coal, Australia Manganese, South Africa Manganese, Cerro Matoso, and Cannington.
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