Kazakhmys & the parallel universe Part (2)…Updated

Kazakhmys & the parallel universe Part (2)…

Well it seems that I am stuck perpetually in Groundhog Day… Another day, another hit to Kazakhmys and the mining spectrum…

In this parallel universe I happened however to come across a number of “anal”yst recommendations, the evolution of one which I present in all its “glory” below. The individuals name has been blotted out and the research house for posterity’s sake! It began to dawn on me in this strange land where stocks get sold down to fractions of book value and Enterprise Values result that bear no relation to reality that in fact taking an “anal”ysts recommendation and doing the opposite could be the path to untold riches. Had I discovered the holy grail of investing here?

Buy at 1500p you say Mr nameless “anal”yst? Thirteen pounds and near 90% capital losses later you say hold? In this strange land it seems that buy means sell and sell means buy?!

In this strange land there were also poor retail investors who I thought probably should not be playing in stocks as it seems they could not read an RNS properly and were confused about the net debt situation.

I tried to clarify this for them that at the end of Sep 2014 KAZ had $1.4bn in net debt. This did not account for the $875m to come from the ENRC sale however nor the $1.3bn from the sale of Ekibastuz. Adjusted for these the group would have net cash of $775m. Going forward the debt profile to build out their new copper mines was likely to result in 2016 peak net debt of $2bn. With the present market cap of just £900m and potential copper EBITDA of over £1bn when the new Boshakol & Atkogay projects come on stream with the material increase in capacity, the stock seemed still ridiculously cheap, even more so if copper prices continued to rise…

And so I got to work once more, hovering up all the cheap stock I could muster and hoping to finally break the curse of groundhog day. All I needed now was our friends at the vampire squid to pop up with a Sell recommendation on KAZ and I would know the end was near…