At risk of analysing a share that is analysed by so many other people, we would like to talk very briefly about Anglo American PLC (AGL). Simply put, we are of the belief that AGL is presently offering a lot of value at current levels. It is no secret that we were not very bullish on resource companies in recent times. The industrial action and, shall we call it, 'political unrest' in the sector has been keeping us away thus far.
AGL has been slowly climbing its way up the ranks of our buy list as the fundamentals of the company are improving. Our proprietary valuation model now ranks it as the 20th strongest share on the Johannesburg Securities Exchange with an intrinsic value of R356.45 a share. This then means that it is trading at a deep discount of almost 31% at present levels (R256.00). Recently it tested the R270.00 level and reversed back down to present level. We believe that this is our opportunity to buy some stock, although it must be said that there is still a chance that it trades down to R235.00 our expected rally plays out. Therefore, we have dipped our toes in the water by getting some stock yesterday at R243.50 and will be ready to add when AGL either hits the next major support level, or if our expected rally plays, we will be buying in the dips.
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| AGL - Daily Chart |
At present the dividend yield comes in at 2.46%, which is slightly shy of its historic yields - before it suspended dividends during the financial crises. Although, with a PE Ratio of 10.14, it certainly is relatively the cheapest it has been in many decades.
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