TOL - 31st Mar, 2026
2 ideas in 200 words #12
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We have been buying….
Metro Mining Ltd (ASX: MMI)
MMI operates the Bauxite Hills mine near Weipa in far north QLD. Operations have recently recommenced (ahead of schedule), with the first ships being loaded currently.
To recap, MMI scrape off the top metre or so, scoop out the bauxite, truck it around 9km to the loading facility and then barge it a short distance out to sea. Because of the simple nature of the operation and close proximity to port, MMI operates in the bottom quartile of the cost curve globally. Not to mention the fact that freight costs to China are US$8/t vs $US$28/t from Guinea.
We forecast EBITDA of $170m versus mkt cap of $420m. Expect aggressive buyback and capital management to kick in shortly.
We have been buying…
Bapcor Ltd (ASX: BAP)
BAP operates in the automotive wholesale/trade and retail segments. The trade segment could loosely be categorised as a duopoly (along with Repco) whilst the retail segment is an oligopoly (add Supercheap Auto).
This should be a fertile backdrop to achieve strong returns. However, BAP has had an almighty fall from grace, plunging from over $7 per share just 3 years ago to a recent low of sub 60c. Comparisons can be tricky as the company recently doubled the share count. But even allowing for this, the stock is trading on 3.8x the average NPAT for the past 8 years.
If the stock only regained 75% of its past earnings, it would still be trading on 5.1x NPAT = too cheap.
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Katana Asset Management was founded in September 2003 as a boutique investment management firm. Katana employs an all opportunity investment mandate being style, sector and market cap agnostic.
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2 stocks mentioned
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Katana Asset Management was founded in September 2003 as a boutique investment management firm. Katana employs an all opportunity investment mandate being style, sector and market cap agnostic.
Expertise
Katana Asset Management was founded in September 2003 as a boutique investment management firm. Katana employs an all opportunity investment mandate being style, sector and market cap agnostic.
Expertise
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