Sims Metal Management Limited (NYSE:SMS)

12/18

As metals and commodities become more rare in nature, we as humans will have to learn how to use what we already have. That means recycling. SMS is a company that does just that so you can be sure they will do great in the late future.

One of the largest scrap operations. With prices going up and the economy rebounding. This should be a good play for the long haul. I'm in with real $.

Recycling and going green is the new fad. And people like profiting off it

Oops, missed this one. There is little not to like here. The cheapest way to get ore out of the ground is not let it back in. With Government encouraging/paying people to junk their cars their should be a nice cheap supply of raw materials. You can only keep an old car for so long. They continue to buy their competition, MMI recently, Fairless this morning. The debt is manageable. I may lose points in the next few months as the slow down continues and China stops buying but long term this will do fine.

Largest metals recycling company with global presence. Down with the rest of the economy but will come back strong. Good "green" business with smart management.

Well priced compared to industry.

recycling the promising

Cyclical company during this downturn in commodities will have a short term effect on this company. Dienst is an excellent CEO with a passion for the business and will put the business in cost cutting mode in the short term. Long term this company has no short term debt, generates cash, and will acquire more businesses in the future to increase their global footprint. At current valuation even with FCF growth in the future this is a $11.50/share business.

Great company, good price.

Group Value play in recycled steel sector. Continued high commodity prices makes recycled steel an efficient alternative.

I like the business in good times and bad.

Steel demand will remain strong and cheaper methods of getting steel will be a key advantage going forward with energy costs rising.

CAPS is the testing ground for my investment newsletter. I like to pick stocks that will benefit from macro trends.

Here's what I like about this stock -
"Sims operates a geographically diverse metals recycling business with a network of processing facilities, many with deep-water port access, supported by an extensive network of feeder yards from which to source recyclable ferrous and non-ferrous metals. It has positions in the metals recycling markets of Australasia, the east and west coasts of the United States, and the United Kingdom. Sims also has a strategic network of trading offices in Asia. Through its Sims Recycling Solutions business, Sims has an emerging global e-recycling business, with established operations in the United Kingdom, Continental Europe and North America and a developing presence in the Asia Pacific region."

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Picked this in conjunction with my MEA call. With raw materials rising in price, and the growing awareness towards environmental friendly practices, the demand for recycling is not only increasing, but becoming assimilated into how we do business. It's the right call, on the right business, at the right time... right now...

Low scrap inventories, increases in iron prices will benefit SMS.

DD

Interesting on its own merrits but may aswell be acquired by one of the major steel conglomerates (see acquisition of David J. Joseph by Nucor).

Metal Recyclers