RE:Scotia comes out with a $20 Target...Its an iron ore stock not an oil stock if you hadn't noticed.
There is a similitude with oil however, the dynamic is the same.
They are both commodities suffering from the same situation:
too much offered and too few buyers.
The Saudis and the Aussis are doing the same thing; innundating the market with supply.
They both have the same objective to put small players out of business. Neither of them have hidden their objective, both have been forthright in stating what they are up to.
LIF has a lot of hidden value however with its three revenu streams: 7% royalty, 10% sales commission, and 15.1% ownership of IOC.
The present stock price pays a dividend of 8% which isn't bad. As long as IOC production is maintained and increased, as is the plan, this stock will, IMHO, present a lot of hidden value.
Is there a possibility for special dividends again ? It would not surprise me. If production goes to 20 million tons it may just happen IMHO.
The published price for iron ore does not reflect the true selling price of IOC product. IOC receives premiums for % iron, the absence of certain elements, the presence of others, as well as its ability to formulate the pellet composition to meet buyer's specifications. The dropping $Can also creates extra revenu. The expansion projects are largely completed so the is much reduced need for costs in $US is favourable.
If there is any problem at this time it is the elevated number of board members. There should be an effort to reduce costs and dump at least 4 members.