Author Topic: NIF-U.TO  (Read 396 times)

samwise

  • Newbie
  • *
  • Posts: 18
NIF-U.TO
« on: January 10, 2019, 06:13:14 PM »
A Canadian net net. Working capital is zinc ore and metal. PPE is a zinc smelter, biggest supplier on North American east coast. No or low commodity price risk to working capital since they seem to either hedge or sell forward. I can't verify this exactly but their WC hasn't moved much with zinc prices.

Zinc smelting charges are at multi year lows, and could improve leading to decent earnings and yield. Or Glencore might decide to buy them out.

Overall a boring investment with not much news. Reading about Glencore cornering zinc mines and rationalizing capacity, which lead to high zinc prices and low smelter charges was the most exciting thing about this investment. Besides the strike last year of course. Stories of hardships faced by east coast industries during the strike seem to indicate that the smelter is also valuable.

Glencore could do a take under, but the last attempt a few years ago was successfully opposed by shareholders, and the same funds are invested now. In fact one person asked "why don't we shut it down since that's worth more" in the annual meeting a year or two ago.

Price has run up last few days on no news. I was hoping to start a discussion because I noticed some people have mentioned it in the "what are you buying" thread.


Lakesider

  • Full Member
  • ***
  • Posts: 139
Re: NIF-U.TO
« Reply #1 on: January 10, 2019, 06:17:24 PM »
The write up on VIC is excellent but a little dated.

https://www.valueinvestorsclub.com/idea/NORANDA_INCOME_FUND/7195876673

I have been in this for a while and added recently, seems that global treatment charges have increased and I'm expecting have a much better year. I think the special dividend is good sign that management are getting less cautious.


samwise

  • Newbie
  • *
  • Posts: 18
Re: NIF-U.TO
« Reply #2 on: January 11, 2019, 07:38:46 PM »
Yes I heard that TC rates might be moving up.

But I actually sold some shares I had bought a few months ago at 1.20 . It isn't a good business and it won't take much for shares to drift back down to 1.20 again. Of course it could double tomorrow and I'd miss some of the upside, but so far I haven't had a good experience in holding onto bad businesses after run ups.