Is Pasminco next?

By Intelligent Investor · 28 Jul 2000

By Intelligent Investor ·
28 Jul 2000

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Pasminco Limited - PAS

Current price

n/a

Price at review

$0.93 at (28 July 2000)

All Prices are in AUD ($)

So which undervalued stock will the majors go for next? Perhaps it will be Pasminco. Back in early June, when Pasminco shares dropped to 74 cents, they were way below any price the stock had traded at in its 11-year life. That was enough of an inducement for Mark Rayner, Chairman of Pasminco, to put his hand up for 10,000 shares in the company, bringing his holding to 30,000. Rayner must feel, as we do, that investors have overreacted to the profit warning we told you about back in issue 56 (Accumulate - $0.80).

Since June the news for Pasminco has been all good. Lead prices have turned around as has zinc, and the Australian dollar has stayed down. Then there was some luck with the insurance companies - in early July the company won a $25m settlement from its insurers over a 1996 mine collapse, not a bad little earner given that Pasminco is on track to enjoy earnings in the $130-150m range in 2001.

Meanwhile, with Pasminco basically in heavy expansion mode as its ramps up production from its Century lead-zinc-silver mine in Queensland, our ACCUMULATE recommendation stands.

IMPORTANT: Intelligent Investor is published by InvestSMART Financial Services Pty Limited AFSL 226435 (Licensee). Information is general financial product advice. You should consider your own personal objectives, financial situation and needs before making any investment decision and review the Product Disclosure Statement. InvestSMART Funds Management Limited (RE) is the responsible entity of various managed investment schemes and is a related party of the Licensee. The RE may own, buy or sell the shares suggested in this article simultaneous with, or following the release of this article. Any such transaction could affect the price of the share. All indications of performance returns are historical and cannot be relied upon as an indicator for future performance.

Is Pasminco next?

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Is Pasminco next?

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