South32 Limited Share Price (S32)

It's coming up against A$ 4.80 resistance in Australia. This is a key resistance level and if it breaks through, the next stop is around the A$5.25 level. It broke 4.80 two days ago, didn't hold and then had another go broke yesterday. It needs to hold. Reaching A$5.00 would make it about £2.80+. That seems expensive in terms of PE, which is why Maquarie etc have a hold rating on it, but all that could change very rapidly when future earnings growth becomes clearer.

By projected growth measures, this is 50% undervalued. Which is why we are seeing strength in the share price now. People are being sensible and taking positions early. Other miners are looking toppish too, which means traders look around for less- obvious companies with strong balance sheets. S32 ticks that box.

If you buy now you lock in for the next run that, I believe, will take S32 into the Big League. It comes with a current yield that could rise from circa 2.3% to 4%+ at these prices. That would suggest a market cap far in excess of the current 15bln... so a capital gain too. I think, over time, you will lock in 12% on your money, year on year, provided S32 can do what it says it will do (and it has done a lot of that under Graham Kerr). But with a market cap that is approximately half its fair value, the likes of Glencore have got to be interested. Not that I would want a take over. I love this share. But either way, it's going to rise (famous last words).

Reckon that's spot on for 12 months time. But it's worth A$12 and it's full of cash...

What’s your target? Mine is 280.

And back in...

Love this share, but that's tops for me now. Always cautious when revenue is falling. Despite optimism, Mozal is gone. Me too. Not to say, I won't be back.