Anglo American (Q1 update 24 April)
Free cash flow of $5 billion for 2017, the highest dividend in ten years and a 50% reduction in net debt mean that Anglo American will have a tough job when it announces its production report for the first quarter. The ongoing rebound in commodity prices, spurred on by fears of Russian sanctions, should also provide support for earnings. A 4.7% yield also boosts the attractiveness of the shares, especially given the sector peer yield of 2.7%.
Having found a bottom back in June 2016, the shares have continued to rally, posting a multi-year high in February at £18.70. The latest bounce off the rising trendline from June 2016 has created a new higher low, so we look for a challenge of £18.70 in due course.