Alex Cowie

Mining, and mining related companies, completely dominate the list of the best performing ASX200 stocks over the last twelve months (Click below for table). And with US rates surging again on last night’s Fed decision, the push to value continues. In last week’s Buy Hold Sell, we hosted Value investing heavyweight John Murray from Perennial Value Management, and Vince Pezzullo from Perpetual Equity Investment Company. As his top value pick, Vince nominated Alumina, telling us: If you look at the spot Alumina price where it is right now, it's gapped up quite significantly to over $310. It's a high quality business with no debt, has good yield, and it's one of the last resource stocks that hasn't run, really, at this point. John nominated BHP, highlighting the ‘massive cashflow generation’:

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John went on to say that: “The free cash flow generation coming out of the big mining companies of which BHP is the largest is massive. So spot prices in the key commodities have picked up significantly compared to earlier this calendar year, so if spot prices stay anywhere near where they now, then the free cash flow generation will be huge over the next couple of years. Kind of ironic that you can make money out of resource cycle stocks at the bottom of the cycle as opposed to the top of the cycle, but that's the way it is with resource stocks sometimes. The free cash flow generation big pickup there, Matt, and therefore, big pickup in dividends as well, which is good. And the share price with follow as well. It's BHP for me.” Vince and John expanded on their views in the following episode. Video and full transcript here. (VIEW LINK)


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