Analyst Actions: Credit Suisse Initiates Coverage of North American Iron Ore

Summarizing Iron Ore Coverage. "North America's combination of under utilised infrastructure, skilled labour, low jurisdictional risk, and cheap power make it a region that global iron ore investors should not ignore. The steel industry's requirements for higher quality raw materials combined with trends of decreasing DSO grades from more traditional iron ore regions are likely to make high quality 'manufactured' iron ore products, such as those produced in parts of North America, an important part of the seaborne market going forwards. The full report summarises our global iron ore coverage, and illustrates that the North American stocks are currently trading on the lowest multiples globally."

The valuation process: "We use a range of valuation tools to look at these stocks both on a stand-alone basis and through the eyes of potential acquirers. From our global database of almost 300 assets and 80 companies, we have handpicked the most relevant comparables for each stock, taking into account life cycle status, diversification, ore body / product type, infrastructure access, and other key value determinants."

Initiating Coverage of North American Iron Ore. "Our investment views differ from the rest of the street on:

ADV.TO - We initiate coverage on Alderon Resources with a NEUTRAL rating and C$2.60 target price. TP puts us at bottom of the street. Although we like this asset and the team that is putting it together, we do not believe the stock deserves the takeover premium it currently attracts.

CLF - : We initiate coverage on Cliffs Natural Resources with a US$90/sh target price and an OUTPERFORM rating. Our global coverage universe provides multiple valuation perspectives, most of which make CLF look cheap relative US metals peers. We see LIF-U.TO as a more logical acquisition target than the more commonly speculated ADV.TO.

LIF-UN.TO - We initiate coverage on Labrador Iron Ore Royalty Corporation with a C$45/share target price and OUTPERFORM rating. TP puts us as top of the street, and we believe that the market has under-appreciated the potential opportunity in this business as the Labrador Trough moves from a state of mine to infrastructure constraint.

NML.TO / LIM.TO - We initiate coverage on Labrador Iron Mines & New Millennium Iron Corporation with a C$8.30/share & C$1.90/share target price and an OUTPERFORM rating respectively. We see a compelling case for a corporate combination, with LIM.TO appearing the more logical acquirer. If LIM.TO is smart enough, we see an opportunity for it to be the consolidator of the sect"

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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