EDISON EQUITY RESEARCH - ALMONTY INDUSTRIES - STRONG FY14 RESULTS; WOULFE MERGER UPDATE
February 13 2015 - 10:24AM
InvestorsHub NewsWire
We increase our valuation of Almonty to C$1.29/share, mostly
owing to strong FY14 financial results. We believe the Woulfe
transaction could be positive for the company, if it manages to
retain IMC as a strategic partner on mutually beneficial terms.
Overall, we maintain our positive view on the stock as we believe
Almonty continues to provide attractive turnaround potential
coupled with growth optionality.
We revise our base case valuation of Almonty from C$1.05/share to
C$1.29/share. This upgrade is primarily driven by the strong FY14
financial results and the mark-to-market exchange rate adjustment,
which was in part offset by the lower APT price assumptions.
Overall, we maintain our positive view on Almonty, which continues
to combine attractive turnaround potential with growth optionality.
That said, current tungsten price weakness increases the execution
risks, leaving no room for mistakes, especially for companies with
relatively low-quality assets.
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