Jul 13, 2022
One of our top 10 positions in the European Value Fund is the Swedish company Boliden. This miner of copper concentrates is also the 3rd largest European producer of copper cathodes. Its stock price has lost 37% since mid-April as the price of copper was impacted by investor fears of an economic slowdown. We believe this creates an unique investment opportunity for the simple fact that demand for copper will be decoupled by the transition to alternative energy sources. Indeed 65% all copper produced around the world today is used to generate and conduct electricity. Boliden gives investors good exposure to this transition without much geopolitical risk. It is a well-managed business with a strong balance sheet that generates high profitability over the cycle ( 18% ROE last year ) and now trades at 6.6 times this year’s earnings.