Mineral Resources Ltd (ASX: MIN) shares have been absolutely hammered this year and are down nearly 49% since January.
Whilst markets were volatile around the US election, the outcome was not enough to awaken the animal spirits of the ASX and bid up resource stocks like "MinRes", as they are known in professional investor circles.
If we're talking the paranormal, perhaps the ghosts of the infamous N. Rothschild, who taught us to "buy when there is blood on the street", may offer some wisdom.
Mineral Resources shares are swimming in a sea of red at the moment, and I have no doubt that the economic sharks are circling the company ahead of its AGM on Thursday. Let's take a look.
Why are Mineral Resources shares drawing attention?
Mineral Resources shares have been pummelled this year as investors digest a number of headlines that have dented market values.
The company has recently faced a series of governance challenges, including allegations concerning financial benefits provided to related parties of Managing Director Chris Ellison.
The company has responded by withdrawing Resolution 4 from the AGM agenda, which related to the approval of securities for Mr Ellison for his role as MD.
The withdrawal is part of the company's efforts to address governance concerns and improve transparency.
It assured shareholders that it had implemented stronger controls on related-party transactions over the past two years.
While these issues don't necessarily impact its recent financial statements, they have added to the uncertainty surrounding the stock.
Is Mineral Resources a buy right now?
The broker community remains divided on whether Mineral Resources shares are worth buying at current levels.
With the stock down nearly 50% this year, some analysts see limited downside, while others remain cautious.
On the downside, Both Citi and UBS maintain sell ratings on the stock, with a $35 price target, indicating minimal upside from current levels.
Goldman Sachs, meanwhile, has a neutral rating and a price target of $41. The broker highlights catalysts such as a lithium price recovery, external mining contracts, and asset sales as positives. However, it also warns of risks in lithium pricing and rising capital costs.
On the upside, Bell Potter has a buy rating on Mineral Resources shares with a trimmed price target of $61.
Bell's rating is driven by the ramp-up of Mineral Resources' Onslow Iron Project, plus its balance sheet deleveraging.
What to expect from the AGM
Investors will closely watch the AGM for updates on governance improvements and the company's operational outlook. Mineral Resources shares will be on high alert.
Vibrations of Elton John and Kiki Dee's 1976 song might be heard in the background: "Don't go breaking my heart", shareholders will sing.
The key topics likely to be discussed include:
- The Onslow Iron Project: Set to ramp up in 2025, this project could be a major growth driver for the company and will be on analysts' minds.
- Lithium market: A rebound in lithium prices could significantly boost Mineral Resources' profitability. It will be interesting to see management's take on this.
- Leadership changes: But it's governance and leadership issues that will remain front and centre, particularly given the recent scrutiny over related-party transactions.
Aside from that, the company has withdrawn Resolution 4 from the voting at its AGM. This related to the approval of additional securities to Ellison.
Foolish takeout
Mineral Resources shares have been hammered this year, meaning the company's AGM will be one to watch.
There is plenty to talk about. Not to mention, plenty not to talk about. Investors will be keen to read between the lines as well.
In the last 12 months, the stock is down more than 44%.
