Moved to Forum: Original Link
This is a BUY time for bargain price of BHP stock….get on board!
BHP ASX under $20
PLANT on 13/11/2015 - 10:48
Related Stores
Comments
Bloody good lesson here for people.
With investments, you can only be certain it will go either way.17.130, 21 Dec 2015
Could just be a massive correction. It was high when the rest of the world was in recession and Iron Ore prices + China's sharp increase in demand caused a huge supply shortage. Or it could be a great time to buy.
slinkster, one thing I can promise you, even in this market, is that I never ask my clients to judge me on my winners. I ask them to judge me on my losers, because I have so few. And in the case of BHP Billiton, based on every technical factor out there, slinkster, we are looking at a grand slam home run.
love that movie
We've all seen what happens after this right?
You can't get a home run in a grand slam.
Baseball…home run with runners on all the bases.
Indeed. I can't help but get excited about baseball references because so few of us play over here, I was too keen to defend it.
Jokes > reality.
Who have been your losers in the past?
Ever wonder why fund managers can't beat the S&P 500? 'Cause they're sheep, and sheep get slaughtered.
It's a response to the BHP tailings dam disaster in South America that killed people and will cost the company millions if not billions.
Billions actually.
I don't think it's a good time to buy. I own shares in BHP and I bought near $30 :(
In my opinion the fallout from their recent disaster in Brazil is a huge unknown and risk!
http://www.afr.com/business/mining/bhp-billiton-share-falls-…
That's my 2 cents anyway…
What do you guys think?
Well, one of the major questions you have to ask yourself (and they have to answer) is: "where is the demand for all their increased production going to come from?"
They're ramping up production to get lower costs, but where's it going to go? China is wallowing, India is not the saviour it was touted as being. Who else in the world uses iron in the quantities they need? Simple economics says that an over supply will lead to lower prices until the demand matches.
As soon as they cut their dividend (which they will have to do, unless iron magically recovers in the next 6 months and the demand I mentioned materialises), it will drop like a stone. They are already paying more than they earn, and with the additional costs of the Brazil disaster, they can't sustain it.
In the similar bought as yourself. I've bought another 50% (of my previous holding) to bring my average cost down a bit.
Hard to say, in the short term, it will probably recover, but BHP shares will fall again if they announce a reduction in dividends, which seems likely with the disaster in Brazil.
http://www.afr.com/business/mining/commonwealth-bank-analyst…
It's very dependent on the chinese slowing economy, it may be a godo price but will the chinese economy slow down more and also where are commodity prices heading..
This is a very interesting stock.
If you use standard "value" metrics, comparing last years earnings and next years earnings, even at $20 the company is expensive last time I looked. But you would hope that with time they will reduce costs, and iron ore prices will increase.
This is only a snapshot of time. If you smooth out the earnings over the last 5 or 10 years, at $20 it is a cheap multiple.If I had some spare cash I'd probably throw some $ on it. Its funny, a year ago I was kicking myself for selling this stock at $34 because I needed the money for a house deposit! Talk about luck..
You would be mad. Their debt is high and their ability to borrow shrinks every day just as their ability to service the debt. Mad to buy, just mad!
BHP spunoff south32 remember, which is worth an extra $1.30 to the price if you are comparing over time. Could say BHP is still expensive even.
My ethics forbid me profiting from mining, especially when they use dodgy profit shifting loopholes to escape paying fair share of tax.
It could still go down. There are 20 Brazilians missing in that tailings dam wall collapse flood.
But hey if you don't have an ethics screener and would buy shares in Adani then go ahead.
The stock market has no ethics, well life doesn't as well.
your ethics will preclude you from investing in the ASX200 then
I wonder how far those ethics extend, abstaining from using steel/metal that's been refined from the mining of bhp as well?
Its good that you can stand up to your belief and standards. Doing what you feel right is not always the easiest option to take
Do your ethics forbid you from driving cars, trains, bicycles and buses made from BHP steel?
"My ethics forbid me profiting from mining" ….um do you live Australia?
If so it's time you left because you have been profiting from mining for the last decade….with the mining boom we just had supporting your lifestyle in this country…ie no recession and improved living….high dollar!
There is a massive difference between being directly and intentionally involved in something or being an unintentional recipient of benefits. I expect no one here supports human slavery and genocide, yet the entire fabric of western existence is built on it.
Kudos to anyone who identifies the morally objectionable and stands against it, especially at personal loss/cost.
Don't assume anything in finance. If you are prepared to lose 75% or more on shares. This is a gamble possibly worth considering.
Consider since 2007/8 crash, ASX index has risen overall, and moderately consistentely.
BHP had halved (from memory), has dropped or stayed flat since 2008.
See: https://au.finance.yahoo.com/q/bc?s=BHP.AX&t=5y&l=on&z=l&q=l&c=^AXJOI'm on vodafone 3g until tomorrow so cannot load charts quickly or do any checking myself.
Anyway, there are bucketshop forces, government, industry and media influences, ect on top of actual company technicals to be influencing future price.
Knee jerk reaction is not hard research general used by buffet, banks and other serious investors.
This probably sounds like crap but I have 17 years trading experience. And didn't get bitten often.
Yippee AND Yahoo, you got minus 1 and I didn't.
The point is "Don't assume you will win in finance", based on light reasoning. Do the long and hard research work and if you are prepared to wait, you will probably benefit. Getting lucky often goes with going against trend for a reason. No offense intended but don't be a fool about this.I agree with you, shame you didn't apply the same reasoning when you 'invested' your money in that ponzi scheme.
@GameChanger:
I think I might well get an Apple ipod shuttle musicplayer for $1, many already have. I was willing to throw away a buck on the chance. You people are the fools I think. I risk nothing much but playing the odds.
You should have punted me thinks ;-)
I once bought into BHP@$47.05… I think it went as low as $27. It took about 3.5 years for me to break even and make a tiny profit @ $47.99. That was a very, very long wait.
They paid dividends while you held them for those 3.5 years, no?
You need to factor that into your overall return.
Otherwise, yes, very volatile, cyclical and need to take a long term view
Disclaimer: I currently hold BHP, I'm underwater but once taking dividends into account its not great but not a total disaster.
The dividends were relatively low at the time, because they were declared in USD and back then, AUD was over $1.00 to the USD. BHP took a massive beating when they were trying to takeover RIO.
ok thanks.
I note that their progressive dividend policy and the falling price makes the yield pretty amazing - but not totally reassuring when nobody seems to think that they will be able to maintain the dividend!
You also need to factor in the cost of the money being invested in the shares vs sitting in a bank account/inflation/general principle of time value of money.
$100 invested 3 years ago is not worth $100 today. It needs to be worth around $110 to just be even using a 3% inflation rate.
Couldnt agree more OP.
My losses on a 10+ year Investment has been handsomely rewarded with dividends along the way, but as before, and always does, markets come and go.People talking here like BHP are going bust, DYOR, I'd say you'd sing a different tune.
On a side note RYG is going ballistic at the moment due to Xped takeover (ADRC) Amazing tech and huge demand, mark my words, you do not want to miss this!
Note, I hold positions in both, and my words are that of a Ozbargainer, helping others save money to get a head.
How much do you need to invest to get a good amount of dividends?
Can you give an example of x amount returns x amout per yearBHP has a 8.3% dividend, so 8.3% of your investment value is paid to you fully franked (tax paid by them)
Great value considering todays rubbish interest rates from the banks.
how much you consider a good return dollar amount is dependent on what you invest to get that 8.3%
:, I was happy with $2490 last divy pay date!They will need to cut that dividend in half unless they want to sink the ship.
U still in? Im over the moon with XPE!!!
Yeah mate in and out daily/weekly since RYG days!
Up $96k since friday last week! (Some people I know think it's birds feed but i'm stoked!)Im over the moon with XPE
Won't be long and XPE will come meet you out in space!
if ur on fb join this group…very informative and daily chat on xped https://www.facebook.com/groups/546557268837152/
@ahly92: Sorry, I only use FB for getting freebies.
I think my last 100 post say I ate at hungry Jacks thanks to the shake and win app
Buy low sell high
Sold my house on a high, now buying BHP because it is low
Probably will go lower, is so buy more
Everyone thought all the banks would have gone bust during the gfc, but not all banks are the same. 5 years later, all whom survived easily doubled
Commodity prices are at the bottom of the cycle, how long it takes before it turns around is anyone's guess. But I sleep better at night knowing its at the bottom of the cycle, rather than the top
Banks doubled from where? You mean they doubled from their GFC lows? Because before the GFC their prices were strong.
FYI - No one thought any of the aussie banks were going bust in the GFC.
Commodity prices have yet to reach the bottom of the cycle.
Call me when BHP reaches $15 then we'll talk.
Yep from GFC lows
Anz, Macquarie bank etc all for $20 or less
My dad made over 1million dollar from GFC he now only works for some to do.
The only thing you get when trying to pick bottoms is smelly fingers.
BHP could fall another $20 - very unlikely but always a possibility.
Fall another $20 and it's free
Let me know when it's free. I will take a billion
Umm.. if by free you mean worthless. A $0 stock is not "free". It means the company has no value - typically when it is going through bankruptcy or liquidation.
Help yourself to as many HIH, ABC Learning or Babcock & Brown shares as you like.
I didn't count, but there are possibly 5000+ more liquidated $0 value companies you can still throw money at.
Contact ASC (Adelaide Steamship Company), only stopped ripping off the Aust taxpayer a few years ago. As example.
I dont know why but i found that funny.
Thanks smelly fingers!hahahhahahahhahahahhahahahhahahahha. Smell is not good.
Don't assume rise. Likely rebound, but if speculating be prepared to lose.
This is Ozbargain. We want to benefit mostly, I think, not punt wildly.The important factor is the cost of extraction
At $15 per ton
There is still room for profit at $40 per ton at current price levels
At $15 per ton most companies go broke, China or no China
No one will be producing by then
Wow, talk about reading headlines without knowing jack sh!t.
Firstly I presume you are talking about iron ore (even though bhp rely heavily on other minerals). Anyway, if that's the case then Vale is the cheapest producer, then Rio, then bhp. If its a race to the bottom like you envisage then bhp is going to go belly up first.
Also, there is a huge difference between extraction costs and total costs to get net profit. Transport being the biggest. Again, Rio beats out all competitors here.
Bhp is facing an uphill battle against stronger competitors. No doubt about it. I wouldn't be buying bhp, there's too much room for further devaluations
BHP is not a buy (maybe for a short term trade, but in the long term it's going much lower).
We're still coming off the globe's biggest ever resources boom, and commodities have a long way further to fall. There's a huge glut of iron ore, China is slowing still, and supply is still coming online (e.g. Gina Rinehart's Roy Hill IO mine), so expect the prices to go much lower.
The bottom of the cycle is still years away.
You've got to remember that those things you mentioned (China slowdown atc) are always factored into the market price.
No one knows for sure when the bottom of the cycle is, but if you think you do why not short them?
Those things are only ever fully factored in to the market price once they've actually happened, until they do plenty of people have their doubts. Much of what is factored into the current price is the view from the mainstream media and economic analysts that BHP is cheap and that its share price is likely to go up.
FWIW this has been their view for the last five years, and they've been consistently wrong:
http://www.smh.com.au/content/dam/images/g/k/y/2/0/d/image.r…
You've also got to remember that the idea that the mining boom is ending has only been around for a couple of years. Pre about 2012-13 the Government, business community and media all thought that the China boom and $170/tonne iron ore would last for decades. They're only slowly coming around to the reality (IMO) that the China boom is done and iron ore is heading back down to $20/tonne.
I've been short the AUD and miners since mid 2014, and it's not been a bad call so far. I expect both to go much lower over the next 2 years.
what do people think about WOW (Woolworths)? buy?
What do you think about their new 'points program'?
I would wait for financials before buying.
Sounds like a terrible idea. Especially with Masters. I'm sure my shopping at Woolies doesn't mean much, but I stopped buying groceries there because of the newly implemented rewards system. Simply terrible. I'm sure there are people like me who feel the same.
Yep, I try not to shop there and there is a 3:1 ratio of Woolworths to Coles in my area.
I thought about it at $25, and thought better of it.
I dont think their problems have been fully priced in. Masters, cut price competition from Aldi and Coles starting to really give them a few good licks.
They have said that their margins will have to decrease from 7% to 5%. Factor in a recession, etc etc.
Nope, maybe once they cut away their excess baggage (i.e Masters), then take a look.
If BHP share price is directly linked to the Chinese demand for iron ores and other minerals it import I can tell you that right now the Chinese economy is not doing as well as the last 2 decades. The infrastructure projects that propelled the demand for iron ore have pretty much dried up in China. The high speed railways are all completed, and the demand for apartments as a speculative investment has all ended, there are so many apartments that are still left unused and unsold (or unfinished) in many secondary and tertiary Chinese cities (even in Shanghai). The real GDP for China is only around 5% which is not bad, but certainly not great.
If BHP is hoping that India will become the next hot spot for increasing demand for Iron Ore, i doubt that will materialise within the next 10 years.
Why gamble with mining when you can gamble with medical marijuana industry for under $0.30 a share (MMJ), with very high chance that the government will legalize canabis for medical purposes (NSW govt have just funded $3 million to trial it for nothing). Or with a baby formula and milk company (A2M). Both are set to boom very soon. Quick example on baby formula, Bellamy went from $3 to $10 in less than a year.
Those are the chances to at least double or triple the investment in like a year or 2. How long would that take to achieve with BHP?
All those companies mentioned are also price takers. Hence also a gamble :P
whats a price taker?
Price takers are companies which can't set their own prices. The price of the product they sell is determined by the market.
Think of Apple as an example of an example of a price maker. They are able to price their goods at a premium, because it is branded Apple. (Think of first iphone - way more expensive but had really cool features, it just works etc etc - They were able to create a demand for the product and set their own price)
BHP digs up minerals/oil etc and but just because it is "BHP" it doesn't add anything further to the product and they have to take the going price. The demand for Commodities has dropped and so prices have fallen.
Growing cannabis is not a price taker.
Be careful in thinking a miner is a price maker by default…
ERI stocks too :)
With A2M, interested as to why you think this is set to boom very soon. I know they are predicting massive growth next FY, and have been experiencing massive growth already with their infant formula, but is this already reflected in their share price? Has the market not priced in this windfall yet? Genuine question - i don't know the answer. I haven't checked what their price/earnings would be based on their FY16 or FY17 predictions.
all those people banning on share suggestions, all they use is the excuse "has it already been priced??". You can pretty much say that statement to alllll shares in the world.. Of course all shares have their information priced, its a pointless statement. And if youre saying its not priced, then youre trading on insider information which is illegal..
So instead of setting their morals low, really just look at where they're comming from with their predictions.. Theyre predicting more babies, more formulas while others are predicting less babies, less formulas, would you then say "isnt less babies, less formulas hence fall in shares been priced already?". this statement is just plain pointless.
I meant has the likely growth of the company already been priced and is it trading at a high earnings multiple
Google - everyone knows its a great company with huge growth prospects. Accordingly, you have to pay more per share compared to the amount of earnings you get per share. Regularly this stock has a price to earnings ratio of 30+
Blackmores - again they've had massive growth, and a massive boost in their share price recently, and last I looked were trading at a PE ratio of 40+. The massive growth prospects for this company has been priced in already and its valuation looks like a tech stock
From the date i posted that, SP jumped another 10c+ , i think its generally speculations. why is BAL at $10? Heck, analysts still value it at about $3, It is way overprice. Why is Sydney and Melbourne homes over $1 mil? It is way over price.
A2M will be one of those stocks that defy standard logic and calculations.
and yet A2M sits at $7.25 - very very happy with jumping on when the original comment was made
hey dude - went in with A2M shortly after this comment…very happy
Sounds like someone attempting a pump and dump to me haha :)
Just kidding, BHP is a highcap stock not soke run of a mill penny stock, the lower valuation is here to stay
If BHP is a buy, so is ARI? RMS?
Blackmores is a definite buy! considering theres free trade agreement between china and aus + partnership with bega to make baby formula + approval from chinese authorities to distribute into china + upcomming christmas period + upcomming chinese new year, people buy them as gifts, it is definitely going to rise at least until end of feb (chinese new year). Will probably drop after that.. so buy now, sell in feb
Anything with "China" in it's "growth story" has been a BUY lol.
With a price to earnings ratio of 45.7 it seems like these were factored into the price months ago. Their earnings may well go up but these factors are factored into their inflated price
lets see whether it rises or falls in the next 2 months then. Currently $168
now at $174
what do you say now eh Danielslater811? its over $200 a share now.. it seems like I was right and what you said before.. with a price earnings ratio of 45.7, these factors were NOT factored into price months ago… just hate those people who ban trade ideas with a single statement "its already priced"… you can say that to every share in existence..
@danielslater811: I was right buddy. buy on 15/11 then sell on feb. I never said it wont fall to $160. I never bought blackmores back then, i bought something better. Nonetheless, the investment choice i recommended would've made handsome returns if you listened.
I live in a iron ore mining town & it is dire around here. BHP's spin off company Arrium was $6.50/ share not long ago & was $0.08 on Friday. Ive learnt that no one has a clue about shares. Want proof, look up Dominos pizzas (US & here). I bought in Babcok & Brown as a strong buy@ $14.50..went bust in 8 months. Also bought into Macquarie bank @$22 mid gfc, now $80. Only invest what you can throw away.
Same here. IDC went kaput. ARI, ERA, KIK, RMS, SAT, TEN are in respirators. Good thing I used "casino" money for buying them so no pain at all. No regrets, but definitely will think 10 times before buying shares again. Shares are a coulda, woulda, shoulda game with a bit of perfect timing sprinkled on the side. And definitely not for everyone.
is it really?