OVER­WEIGHT

Sims Metal (SGM) $10.58

The Sunday Times - - YOUR MONEY -

Volatile mar­kets and an opaque in­dus­try mean Sims Metal Man­age­ment is of­ten viewed as a trad­ing stock. But it presents a rare op­por­tu­nity where short-term trad­ing co­in­cides with longer-term value. SGM has led in adapt­ing to China’s en­vi­ron­men­tal con­trols and is well po­si­tioned to meet the re­quire­ments. As a scrap bro­ker/trader, vol­umes re­main the key driver of prof­itabil­ity and gen­er­ally traded favourably across CY2018, a fac­tor we ex­pect will aid prof­itabil­ity in FY2019.

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