Broker snap: Glencore Xstrata is a 'core holding', says Tradenext

13th May 2013 16:25

Tradenext has labelled Glencore Xstrata as a 'core holding' in the mining sector following the release of the company's maiden first-quarter production report as a newly-merged firm.After a subdued start, the shares had drifted slightly higher by afternoon trade as the market welcomed the broadly in-line results, which saw most asset classes register production growth on the year before."The sheer size of the group operations and enterprise value at some £95bn means that trading on a price-to-earnings ratio of 10.8, shares in the group are valued roughly on par with rivals Billiton and Rio Tinto, although arguably the combined resource of Glenstrata and Xstrata has created a broader and more resilient spread of resources," said Ronnie Chopra, Head of Strategy at Tradenext."With shares viewed as a core holding for anyone with an interest in the mining sector due to its size, Tradenext believes the combined entity makes for an attractive long-term 'buy' around 340p."The stock was up 1.02% at 347.4p before the close.BC