Norsk Hydro Offers Real Growth in Materials

Trading in New York as a newly independent aluminum company since October 11, hold-rated Norsk Hydro (NHY) offers sound participation in a materials business that should grow its real worth in a climate of declining value for financial assets. A low market unlevered cash flow multiple (EV/Ebitda) of 7.1 times, or years, relies on our projection of unlevered cash flow (Ebitda) taking account of third quarter results reported today.

The latest quarter was the last to include oil and gas operations transferred to buy-recommended StatoilHydro (STO) in exchange for STO stock distributed to NHY shareholders. Though we have tracked NHY’s aluminum operations for more than a decade, we are not sure what net present value [NPV] should be for the pure aluminum company. We think the stock might readily be worth more than our tentative NPV of $13 a share.

Moreover, we have had good experience with NHY management over the years, though there were times one had to patient. Finally, an impending delisting of NHY stock from the New York Stock Exchange should not cause much concern as U.S. investors can expect to trade the shares over-the-counter at prices close to the dollar equivalent of transactions in Oslo, Norway or London.

Originally published on October 30, 2007.

Comments

[klh:]

are you sure about being able to keep the shares after delisting? they delisted ABB a number of years ago, and kind Mr Levitt forced me (and others) to sell my shares since I wasnt a quaified investor. I had them as part of my core holding; the stock was a c. 5 bagger since.

2007 Dec 04 08:26 PM

[PAL O MINE?:]

The new symbol appears to be NHYDY.PK.
I bought 100 shares of NHY in a US brokerage account last month before the delist and have not been asked to liquidate, etc. Since it's been moved to the Pink sheets, I can't get timely intra day quotes, however, a big difference from before.

2007 Dec 04 09:05 PM