RE:RE:RE:RE:RE:EightGold Companies Starting to Develop Their Copper Assets Interview with Ralph M.Profiti
Ralph M. Profiti, CFA, is a Principal focused on Metals & Mining equity research at Eight Capital, covering Senior North American Industrial Metals and Precious Metals companies and commodities. His previous experience includes being a key member of the Global Metals & Mining Equity Research Teams at Credit Suisse and Deutsche Bank, covering North American Industrial Metals & Precious Metals equities in Toronto and New York, as well as Corporate Banking at Royal Bank of Canada. Mr. Profiti earned a Bachelor in Engineering degree from Ryerson University’s School of Civil Engineering and a Masters in Business Administration from the University of Windsor’s Odette School of Business, and is a CFA charterholder. Profile
TWST: Let’s start with a snapshot of your coverage universe, and more broadly, is there anything you would note about Eight Capital’s research on the metals and mining sector that makes you stand out from peers?
Mr. Profiti: I come to this with the perspective of almost 25 years as a sell-side analyst and the last five have been at Eight Capital. Eight Capital is one of the largest independent broker/dealers in Canada. We are heavily focused on resources, so we have numerous analysts — in fact, we have six analysts covering metals and mining and oil and gas. That’s our primary focus. My coverage is basically large-cap North American miners that are focused on the three commodities that are most relevant to the coverage, which are gold, copper and uranium. We take the view, in terms of differentiation, by I think having a focus on three key things: Number one is to have more robust valuation estimates versus our competitors, meaning more accurate. I think secondly, we tend to have a differentiated view on valuation methodology. And then thirdly, given the exposure and our breadth of coverage and client relationships, I think we’re a very good gauge of transitions in investor sentiment when it comes to investing in metals and mining equities. I think that those three key things are how we try to leverage ourselves versus our competitors.
TWST: What is your overall outlook for the sector right now, and what’s behind that?
Mr. Profiti: I think all three commodities — copper, gold and uranium — are different when we think about timing the next cycle. Each of them has its own differentiating factors. When you think about copper, the three driving forces from our view are, number one, will economic conditions deteriorate further, or will we have more of a resurgence from the part of Chinese demand when it comes to things like stimulus and demand recovery? Copper is, I believe, more on the precipice of an earlier commodity reboot, as opposed to the other two commodities. The second thing is that I do see what’s helping the copper thesis is a continuation of this reversal in the strength of the U.S. dollar, which from an inverse relationship standpoint is good for all commodities. And then the third thing, I think that copper is going to benefit in the medium to long term by what is going to be a more industry-delayed response to higher prices, meaning that the supply side will continue to be challenged on meeting higher prices with higher supply, and that I think elongates the term in which you could have this strength in a prolonged copper cycle.