The South32 Ltd (ASX: S32) share price has hit a new 52-week low today as investors scramble out of the stock. South32 has already had a tough 2019 so far – S32 shares started the year at $3.27 and got all the way up to $3.95 in March, before sliding down below the $3 level in mid-July. This trend has continued to where we see the share price today – a new 52-week low of $2.83.
So, what has happened to South32 to cause such a sentiment turn-around?
A refresher on South32
South32 is the newest 'big' miner on the ASX, after it was spun-out of BHP Group Ltd (ASX: BHP) in 2015. BHP decided it wanted to focus on its 'core' commodities of coal, oil, copper and iron and so everything that didn't make this cut was bundled off into South32. This made the company a highly diversified miner from the start, with substantial assets in silver, lead, nickel, manganese and aluminium production.
As you may have picked up, South32 has little to no exposure to iron ore or gold. These two commodities have driven the largest resource gains on the ASX for 2019 so far, and so South32 has looked very boring for investors tripping over it to buy BHP or Fortescue Metals Group Ltd (ASX: FMG) shares.
Why have S32 shares gone south?
In addition to the reason above, plenty of investors are speculating that the combined interim and special dividends South32 paid out in February (9.6 cents per share) are unlikely to be repeated when the final 2019 dividend rolls around. South32 is facing commodity price headwinds for many of its products and volumes from one of its South African coal mines have been affected by equipment shortages and domestic demand.
In addition to this, the resumption of tensions in the US–China trade war last week (including reports China is set to ban all US food imports) is an anathema to export-dependent resource stocks like S32, which has become reliant on China's economic growth for earnings.
Foolish takeaway
Although there seem to be building headwinds on the horizon for South32, I still think that the company is a high-quality, low-cost and nicely diversified miner that might present a value opportunity at these share price levels. Personally, I will be keeping my eye on this one with great interest, especially on its upcoming dividend announcement.
