handoverfist
20 Jul 2015
Are the risks real? We have a profitable and what seems to be a well run company. It has an undemanding price to earnings ratio of around five and a dividend yield of over 4%. Dividend seems to be well covered and cash reserves seem healthy. Telephone queries to CAML on investment are answered promptly and in a straightforward manner. I feel comfortable with my holding and I am inclined to buy more.It is sensible to look at what might go wrong - the risk factors.First of all like all copper producers and recyclers we are actually investing in the price of copper. As I'm sure you know there is an increaasing demand for copper with over 80% of that demand being met by recycling. World copper prices now are at their lowest for over five years.[link] does not seem to have affected the profits of CAM and they seem to be able to turn a profit even at this low copper price. Obviously if the copper price goes higher so will CAM profits. The production is a limited resource ie CAM are 'using it up' but they do have a transferable technology which could be used elsewhere. The political situation in the country they operate in. It probably is not as stable as we would like but since there is a limited lifetime to the resources there this may improve or we may have finished operating there if it all goes wrong.The company has a relatively short history so it would be nice to look at a longer term record of it. All in all I feel comfortable increasing my holding but I would be interested in the views of others. Especially does anyone have any feel for why the price of copper has been so long in this downward cycle and how long before it goes up.gla
