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STOCK BROKERAGE Meridian Securities, Inc. has advised investors to buy shares of Atlas Consolidated Mining and Development Corp., despite the miner's net loss in the first half.
“The price of the stock have undergone a beating, due to lower copper prices, that it now looks cheap from a book value perspective. We place a fair value of P13.73 per share, well below the book value of P17.16 per share to account for further uncertainty,” said Edwin C. Salonga, the brokerage's executive director.
“We believe that copper prices may be poised for a rebound since the current price right now is less than or equal the production costs of the commodity,” he added.
“Likewise, the US economy is at a solid growth phase while China is working hard on its economic policy to mitigate the hard landing.”
In a disclosure to the stock exchange, the miner said it posted a net loss of P611 million in the first half, a reversal of the P989-million net income recorded in the same period last year.
The drop in income was mainly brought by the 39% decline in revenues due to lower metal prices and volumes realized so far this year.
The miner said that although copper prices improved in the second quarter, the average realized copper price of $2.67 per pound was still 15% below the $3.15 per pound achieved in the first half of the year.
Shares in AT closed at P4.55 apiece last Friday, up P0.04 or 0.89% from the previous day. For the year, the stock has lost 55.39%. Mr. Salonga placed the stock's near-term support level at P2.70 and resistance at P5.50. —