MMX Rises After Credit Suisse Reiterates "Outperform" Rating

By Paulo Winterstein
MMX Mineracao & Metalicos SA, the mining company controlled by Brazilian billionaire Eike Batista, rose to the highest in four weeks in Sao Paulo trading after Credit Suisse reiterated it "outperform" rating.
Rio de Janeiro-based MMX rose 5.3 percent to 18.20 reais at 9:52 a.m. New York time, the highest since July 2.
MMX, which spun off two units and started trading separately yesterday, is at an "attractive" valuation relative to peers, with its iron-ore assets trading at half the price of theirs, analysts including Roger Downey wrote in a note. The mining company is a "growth story," with management expanding operations.
"The company's new business plan is a clear indication of management's ability to generate projects and ideas,: the analysts wrote. The company's ``extensive'' exploration in Brazil and Chile is "expanding MMX's geographical footprint and creating a new platform for growth into other minerals."
The mining company's iron-ore operations have an enterprise value -- or sum of stock and debt, minus cash -- of $100 a ton, compared with $200 a ton for the mining assets of Brazilian steelmaker Cia. Siderurgica Nacional SA and $230 for Australian mining companies, the analysts wrote.
To contact the reporter on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net