ANGLO AMERICAN (AAL) £15.62
Loss to date: 5.4% Original entry point: Buy at £16.52, 12 July 2018
THE FTSE 100 miner has held up well considering the negative backdrop for commodity stocks – a brewing trade war, falling oil prices, fears about China’s appetite for raw materials and general concerns about a slowdown in global economic growth.
This backdrop might explain why Anglo appears in the list of most shorted stocks, plus the fact that platinum prices have been weak this year, so too rough diamond prices. It is a major producer of both commodities.
We take comfort in the stock’s resilience during troubled times. We’re only down 5.4% since initiating the Great Idea trade in July which is an outperformance versus the FTSE 100, down 7.3% over the same period.
The business is prioritising debt reduction to further strengthen its balance sheet. Jefferies analyst Christopher LaFemina says Anglo has high-quality copper production growth and lots of cost cutting opportunities.