Foraging for Opportunity in South 32 (ASX:S32)

South32 (ASX:S32), a BHP spinoff, owns a range of mines in the southern hemisphere including assets in Australia, South Africa and South America. Most of the mines are high quality and low cost. But the commodities involved—aluminium, coal, nickel and manganese—are all in a deep slump, and South Africa and South America are not the easiest places to do business. Labour strikes and power outages are everyday operating risks. Amid the ongoing rout in mining shares, the company’s stock price has slid 44% from $2.45 to $1.37. We sense opportunity. The malaise in commodity prices is cushioned by weaker local currencies in South32's operating regions. We don’t expect a rebound in commodity prices any time soon, but with minimal debt and low-cost mines, South32 is well positioned to cut costs and wait this period out. Many peers do not have the same luxury. Click this (VIEW LINK) to read more on South32 and access our latest quarterly report.


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Founder & Chief Investment Officer
Forager

Steve began Forager Funds in 2009, and now manages approximately $470m across two funds. Offering a listed Australian Shares Fund (FOR) and an unlisted International Shares Fund, Steve focuses on long-term investing in undervalued companies.

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