Saturday, January 10, 2009

Highveld Steel and Vanadium - HSVLY

Highveld Steel and Vanadium (HSVLY) provides good exposure to the commodities sector, while at the same time giving the investor significant dividend income. While I don't expect the huge dividend to be maintained at this level indefinitely, it is unlikely to ever be cut completely.

The price of HSVLY stock has suffered in recent months falling to a 52 week low of $4.75. HSVLY currently trades at $7.20, well below the 52 week high of $24.94, which I believe presents real value as the stock has been heavily oversold. Highveld Steel and Vanadium (HSVLY) is among the most solvent and profitable mining companies, and will benefit strongly from any infrastructure programs put in place by the incoming Obama administration.

Highveld Steel and Vanadium (HSVLY) currently trades at a trailing P/E of 3.50, with very little debt, and I anticipate a 12-month price target of $16 as the economic outlook improves in the second half of the year.

Disclosure: At the time of writing the author did not hold shares in Highveld Steel and Vanadium (HSVLY).

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