Independence Group NL
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IGO Details
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Diversified asset portfolio coupled with strong prospects: Independence Group NL (ASX: IGO) stock fell over 4% on June 21, 2016 due to fall in gold prices while fears of Brexit eased out on the back of favorable “Remain” campaign. On the other hand, despite the gold prices influence on the stock price, IGO has a diversified portfolio of high margin assets. The group’s Tropicana mill expansion and Nova Nickel/Copper Project progress are on track. The first production from Nova would start in December 2016. The group is even pursuing belt scale exploration targets in Australia.
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Recommendation: The shares of IGO generated over 40.9% in the last six months (as of June 20, 2016) and given its strong projects at hand, we remain bullish on the stock. We give a “Buy” recommendation on this dividend yield stock at the current price of $3.14
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IGO prospects based on Macquarie research (Source: Company Reports)
Fortescue Metals Group Limited
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FMG Details
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Management Changes: Fortescue Metals Group Limited (ASX: FMG) stock fell over 2.9% on June 21, 2016 due to fall in commodity prices. The group reported that they appointed Mr Stephen Pearce as Chief Financial Officer, who comes with international finance and leadership experience to drive the group’s growth and financial position. FMG delivered over 87.7% in the last six months (as of June 20, 2016) driven by the recovery in the iron prices. FMG is still a low cost producer and intends to achieve a low cost target with capex below $2/t. The group repaid US$2.3 billion in FY16.
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Recommendation: We maintain our “Hold” recommendation at the current price of $3.26
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Cost guidance for FY16 (Source: Company Reports)
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