Metals and Mining
October 31, 2011
After suffering a 77% YtD drop, Yenakievo Steel’s share price surged 19.6% on Oct. 27 (compared to the UX index’s rise of 8.6% on that day). We partly attribute this outperformance to a reduction in the company’s operating losses over 2Q-3Q11; the average EBITDA margin stood at -4% for the period, up from -14% over 4Q09-1Q11. Yenakievo now trades at 2012E EV/Sales of 0.03x, significantly lower than the 0.08x at which it traded at the bottom of the crisis period of 1Q09. We therefore believe that the ENMZ stock is heavily oversold.
