Well positioned to handle resource volatility

Article Excerpt

SHERRITT INTERNATIONAL $5.64 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704-6698; www.sherritt.com; Shares outstanding: 296.2 million; Market cap: $1.6 billion; Dividend yield: 2.7%) is a diversified natural-resource company that produces nickel, cobalt, thermal coal, oil and gas. It also manages 376 megawatts of power-generation capacity in Cuba. Sherritt is a major nickel producer, with operations in Cuba and Canada. It is also close to finishing a mine at its 40%-owned Ambatovy project on the island nation of Madagascar, off Africa’s east coast. As well, Sherritt produces oil and gas in Cuba, Spain and Pakistan. It is also Canada’s largest thermal coal producer. In the three months ended June 30, 2011, Sherritt’s revenue rose 23.2%, to $500.6 million from $406.3 million. Excluding one-time items, earnings per share rose 5.3%, to $0.20 from $0.19. Higher nickel sales, as well as higher prices for coal and oil, were the main reasons for the improved results. Cash flow per share rose 13.6%, to $0.50 from $0.44. Sherritt’s long-term…