Star stock picker Angus Aitken gets aboard the Chris Ellison redemption train, UBS also labels MinRes a buy

Mineral Resources shares are surging as brokers get behind the battered mining business and its boss, with one prominent Sydney stock picker saying Chris Ellison is not “a drongo”. Angus Aitken last week told clients that “you make the most money when people are too scared” to invest after reading “BS headlines” that are “often planted by hedge funds” short-selling a company. “You make the most money when good companies are down in the dumps for a short term reason and that is Mineral Resources here today at these prices,” he said. “I cannot think of a better buying opportunity here in a large cap that is well run and has gone from hero to hated and people have literally put in the dustbin multiple decades of growth. “In stockbroking over 25 years you get to know the absolute key to making the largest returns is doing the absolute opposite to the herd . . . our best successes over that period are always backing good people and long-term businesses, without many friends in the market and that is MinRes today.” MinRes shares finished up 11.6 per cent on Monday to $24.49, following a UBS buy recommendation. Its stock is still worth less than half of what it was during mid-October as high debt, corporate governance headaches, low lithium prices and operational issues at the all-important Onslow iron ore project weigh on sentiment. Mr Aitken said MinRes’ ballooning net debt that has surpassed $5 billion will soon “blow over” and got behind the miner’s embattled managing director. Mr Ellison is set to step down as boss by May next year in light of his various indiscretions, which included dodging tax and misusing company resources. “Eighteen months ago people valued Chris Ellison like a genius and talked about him in the same way, now they value him as if he is a drongo and we don’t think the bloke is a drongo,” he said. “We think zero has changed in the blokes (sic) smart business brains and the stock price here is pricing in Chris as if he has lost all his business brains, which he clearly hasn’t. “I cannot believe how many people own BHP and Rio Tinto-type companies today where there isn’t a single entrepreneurial person in senior management or on the board. “They allocate capital in a dreadful way and not one institutional investor criticises BHP and Rio for being absolutely useless companies but they will absolutely lay into a business that has created from scratch a huge and growing mining and related business.” Mr Aitken’s impassioned support of MinRes came as global investment UBS bank on Monday also brightened its outlook for the Osborne Park-headquartered company. In a more data-driven and detail-oriented note than Mr Aitken’s, UBS analyst Lachlan Shaw said MinRes had been oversold and was now a buy. “We have reassessed our base case, factoring in haul road repairs and guidance downgrades to FY2025 Onslow shipments and mining services tonnes, conservative low-grade discounts . . . our revised price target is $28.60 per share.” While MinRes shares have been tumbling, Melbourne fund manager L1 Capital — a public exponent of Mr Ellison remaining as boss — has been hoovering up the stock and is now the company’s number two shareholder behind the MinRes founder and former billionaire.