Hi Eshmun,
Am I missing something here because I would have thought that a low FCF to MC ratio indicates an over valued stock rather than an under valued one? In which case the SBM slide that you refer to paints a negative position for RSG, which as you say has RSG under 4% but SBM over 12% .
I would rather pay $1 for a share with FCF of $0.75/share than $1 for one with $0.25/share (not that these ratios apply to SBM or RSG).
FCF = operating cash flow minus capex, exploration and investments.
On the other hand, the same slide shows NPAT vs MC and RSG is well up and near SBM on that slide. Effectively we are talking PE here (actually, the inverse of).
I agree that LOM is a significant factor and on this basis RSG is looking pretty good, if we can believe the company's projections with an average of 19+ years. As to production, the predicted 500Koz p.a. puts it firmly into the second tier after giants like NCM and Barrick etc.
RSG Price at posting:
$1.20 Sentiment: Hold Disclosure: Held
(20min delay)
