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SOUTH32 LTD SPON ADR EA REPR 5 ORD (OTCMKTS:SOUHY) was a massive decliner during Tuesday’s trading session, plunging by 8% on heavy volumes, which were 4 times the 30 day average turnover. Bears seem to be in total control as the stock continues to form lower tops and lower bottoms. South32 LTD currently trades below all important moving averages, which is a bearish sign. The oscillator measuring momentum continues to trend lower and shows no signs of a reversal. The RSI oscillator has continued its downtrend indicative of the strong bearish momentum. The stock hit a fresh 52-week low during yesterdays’ trading session, which is bearish.

SOUHY

The stock price of SOUTH32 LTD SPON ADR EA REPR 5 ORD (OTCMKTS:SOUHY) crashed by a wide margin during the previous trading session. The mining company recently received an average broker rating from two sell-side analysts, which were surveyed by Zacks Investment Research.

Rating outlook

According to the polled brokerage firms, the company’s average rating score stands at 3, which implies a ‘Hold’ recommendation. In addition to this, Zacks has also issued an Industry rank of 159 out of 265 similar companies in the industry. A November’s report issued by Zacks Investment Research had revised the rating on the company upwards to ‘Hold’ from its earlier ‘sell’ recommendation. Following which, Citigroup also released a rating outlook on the company, where it downgraded the rating to ‘neutral’ from ‘buy’.

Meanwhile, the weak commodity prices continue to put pressure on SOUTH32 LTD SPON ADR EA REPR 5 ORD (OTCMKTS:SOUHY)’s forward plans. At a recent analyst roundtable, the company has warned three of its operations, namely Cerro Matoso nickel mine in Colombia, the South Africa manganese ops and Illawarra metallurgical coal, to become cash flow positive before December 31 or face closure.

Restructuring plans

The company’s chief Graham Kerr signalled more troubled times for commodities ahead. He told the analysts that the commodity prices may witness price weakness for another two years before recovering to normal levels. Despite the odds, the company is still positioned to generate cash and is firm on its dividend payout policy, which is pegged at 40% of the earnings.

At the same time, the company has indicated that it might undertake restructuring options, which may include a reduction in headcount. According to analysts, the outlook for the company over short to medium term remains negative.

The stock price of SOUTH32 LTD SPON ADR EA REPR 5 ORD (OTCMKTS:SOUHY) fell by over 8% to $3.60 yesterday.

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Steve Kanaval: Portfolio Manager/Writer/ Market Analyst Steve began his career in the Trading Pits in Chicago making markets at the Chicago Mercantile Exchange (NYSE:CME) the Chicago Board of Trade and the CBOE in the early 80’s. He ran the Morgan Stanley Derivative Prop Trading for the firm specializing in Index Arbitrage. He continued his career as a Trader/Portfolio Manager for multiple Hedge Funds during the Internet Boom of the 90’s managing large portfolios. Steve is known as an expert in MicroCap Technology Stocks and the emerging Digital Currency markets as a Portfolio Manager for his Family Office. Steve has managed portfolio’s in volatile asset classes for 3 decades as a commodity trader, hedge fund manager and digital currency trader and miner. Steve publishes his views on the asset classes in a public forum and has published more than 10,000 articles simplifying these complex and volatile assets for readers. His work is published on multiple sites including Bloomberg, Equities.com, Hacked.com, CryptoCurrencyNews as a paid contributor. His work includes research, journalism and archived video on important market volatility related to stocks, digital currency and other volatile misunderstood asset classes. He offers a humorous, unique insight and the related back stories and drivers for readers interested in volatility and emerging market assets. Full disclosure Steve is long 25 digital currencies and sits on the board of multiple public companies involved in digital currencies, and owns shares in these companies from time to time.

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