Noranda Income Fund Unit T.NIF.UN

RE:RE:RE:RE:Why woudl I ever invest in Noranda? Help please

[Paykel2]

Glencore recently helped Trevali, a company in which they have a 26% interest, when that company got into difficulty.  So, I would expect that they would be there for Noranda if required.  However, it is very unlikely that Noranda will require and significant help as they have a working capital of US$231 million, most of which is concentrate inventory, work in process and accounts receivable.  Their working capital exceeds their debt by US$69 million.  So, if the operation shuts down tomorrow and they liquidate their working capital and pay off their debt, there would be US$69 million left over.  This is equivalent to CAN$1.78 per share at the current exchange rate.  Benjiman Graham called this net-net working capital and this was one of his criteria when looking for stocks to buy.  He also used book value.  Noranda's book value is US$3.04 per share or about CAN$ 4.00 per share.  Based on these two measures, Noranda is a screaming buy.  However until treatment charges improve, the company may have a few tough quarters