Australian (ASX) Stock Market Forum

BHP - BHP Group

Jump to new
Julia said:
Just trying very hard not to say that, despite all the above pontifications, the 'value' of a stock is simply what someone is prepared to pay for it.

Sorry.
Click to expand...

You can say that and it is true to a point.

I but I would say that there is a difference between what something "costs" and what some thing is "worth"

the "Market" value of a company changes almost daily, But it's intrinsic value does not.

For instance when BHP was trading at $50 then 12 months later it was $23 you could say that neither value represented it's true intrinsic value and that it's true value was some where in between. So it's market value can fluctuate but it's true long term or intrinsic value does not really change throughout the year.
 
Tysonboss1 said:
I would like to ask you one question,

If you decided that you wished to buy one of the local small businesses in your community, and there were about 10 businesses that were for sale that were all being run by staff so they did not require your effort at all, How would you go about deciding which business to buy.

No doubt the first question you would ask is how much is each business making each year and how much they want you to pay for it.

You would realise that there is a big difference between buying a company for $500K that earns $100K/year and buying one for $1,000,000 that also earns $100K per year.

Now if you would conduct this simple analysis on a small business before you invest why not conduct the same analysis on a company you wish to purchase shares in.
Click to expand...

I don't believe this same question and answer system applies to mega companies.. its just not that simple.
BHP maybe has 1000 people tying to keep a track of all the costs, income, outgoings , resources, sales, assets...which are all massaged to make look as best as it possibly could.
then 4 times a year they pay a company to estimate the **** out of them and present it to he market.

my :2twocents the larger the company the less the value formula's work
 
noie said:
I don't believe this same question and answer system applies to mega companies.. its just not that simple.
BHP maybe has 1000 people tying to keep a track of all the costs, income, outgoings , resources, sales, assets...which are all massaged to make look as best as it possibly could.
then 4 times a year they pay a company to estimate the **** out of them and present it to he market.

my :2twocents the larger the company the less the value formula's work
Click to expand...

So you believe that the price that you purchase that stock at will make no difference to your investment outcome :confused:

At the end of the day you are purchasing a stock which represents a ownership in a certain percentage of that company. Now over the next 10 years that percentage of the company you own will produce a certain amount of return, and that return will determine the dividends you get paid over that time and also the trading range that the stock is trading 10 years from now.

The fact is if you take a value approach to investing you are much more likely to buy stocks at prices that will cause you to have a solid return on investment over that time.
 
Tysonboss1 said:
I would like to ask you one question,

If you decided that you wished to buy one of the local small businesses in your community, and there were about 10 businesses that were for sale that were all being run by staff so they did not require your effort at all, How would you go about deciding which business to buy.

No doubt the first question you would ask is how much is each business making each year and how much they want you to pay for it.

You would realise that there is a big difference between buying a company for $500K that earns $100K/year and buying one for $1,000,000 that also earns $100K per year.

Now if you would conduct this simple analysis on a small business before you invest why not conduct the same analysis on a company you wish to purchase shares in.
Click to expand...

I would buy the business that I have had previous similar exposure to and pay a premium to use my existing network base to grow it. You failed to mention that the business at $1,000,000 might be operating at a 30% margin while the cheaper Company operates at a 7% margin, now which of the two is better value taking into consideration the higher cost ratio required to operate a business with a lower margin. Which business will see consolidated growth potential using this concept? BHP
 
OK2 said:
Tysonboss what makes your criteria of evaluation set the standard for acceptable comment? Perhaps other people may see your analysis as lacking in fundamentals also. I can only assume that you set the bar height.

When BHP was in the high 20's in the short term past was it also overvalued? Why did Potash Corp jump hugely in value on the takeover bid? It comes back to basics and not analysis, supply and demand.

Tysonboss are you a bean counter (accountant)???
Click to expand...

No I am not a bean counter, Just an ex soldier that owns a succesfull manufacturing and retail operation, Saying that I am at the point where my investment activities are almost generating more than my businesses.

In answer to you question, no I did not think that BHP was over valued in the 20's.

Thirdly when you answered that you would by the small business that had the highest return on capital you are infact conducting an analysis, so you can't be totally against doing any form of analysis.

In regards to potash's price jumping it is most likly a result of gamblers/traders jumping in making a bet that BHP will raise their bid, If they did not conduct any analysis and have over paid and BHP drops the takeover bid they have a good chance of getting a poor result.

Or is could be that potash was really good value at that price and when bhp made the bid it drew alot of attention to it and caused more investors to move in, I have no idea whether potash is good value I have not looked at it.
 
Tysonboss1 said:
No I am not a bean counter, Just an ex soldier that owns a succesfull manufacturing and retail operation, Saying that I am at the point where my investment activities are almost generating more than my businesses.

In answer to you question, no I did not think that BHP was over valued in the 20's.

Thirdly when you answered that you would by the small business that had the highest return on capital you are infact conducting an analysis, so you can't be totally against doing any form of analysis.

In regards to potash's price jumping it is most likly a result of gamblers/traders jumping in making a bet that BHP will raise their bid, If they did not conduct any analysis and have over paid and BHP drops the takeover bid they have a good chance of getting a poor result.

Or is could be that potash was really good value at that price and when bhp made the bid it drew alot of attention to it and caused more investors to move in, I have no idea whether potash is good value I have not looked at it.
Click to expand...

Can a solicitor ever be an ex, it is like saying ex mum or ex dad. Save the defamation case it was just a joke.

I would be happy to take a few directed tips on what works for you.
 
Tysonboss1 said:
So you believe that the price that you purchase that stock at will make no difference to your investment outcome :confused:

At the end of the day you are purchasing a stock which represents a ownership in a certain percentage of that company. Now over the next 10 years that percentage of the company you own will produce a certain amount of return, and that return will determine the dividends you get paid over that time and also the trading range that the stock is trading 10 years from now.

The fact is if you take a value approach to investing you are much more likely to buy stocks at prices that will cause you to have a solid return on investment over that time.
Click to expand...

I believe there are multiple inputs into the current price of a stock.
people who rely on the one method often get confused, or lost in all the equations.

I am not adverse to paying a fair price, I do not only enter when I consider the intrinsic value to be great.

and some days i trade the momentum , or the news , or the analysts expectations.

and i do not believe Value is omnipotent, I wish it was but it is not.
 
OK2 said:
BHP is still undervalued. They are actively pursuing acquisitions and diversifying at the same time. The BIG Australian will never fail!!!

I am still waiting for the stock market to collapse as you have been calling for the last few years. Keep crying Wolf GG.
Click to expand...

Well we did have the GFC!!.

Its going to be nasty the second one.

Just look at the charts. Even the funnymentalists are running scared.

gg
 
As it would appear that ASF is being taken over by those more used to following penny stocks employing hobbits, I will persist in commenting , often alone , on one of our greatest, if not the greatest, Aussie miner, BHP.

This is a very intertesting weekly chart of BHP extending from yesterday evening back to mid 2005.

I have placed a fibonnaci retracement from the highs of 16th May 2008 to the low of 21st November 2008.

At the significant Fibonnaci level of 38.2%, and at the low,I have retraced support and resistance lines.

While there very well may be accumulation occurring at present,it is more likely distribution, looking at the volume and open and close of bars.

I may be wrong, but a break below $35 would be worrying, and below $31.25 quite alarming, heading in to October, a month in which I try and distribute as many gumnuts as possible to a selling populace.

The resistance and support about $31 in the past is very impressive.

Having said that, the medium term trend is up, and the optimists could argue that we are in for the mother of all Wave 3's.

Ain't life interesting.

gg
 

Attachments

  • bhp.jpg
    bhp.jpg
    120 KB · Views: 24
I must be the only poster interested in this tiddler.

Small miners are out on ASF atm.

We enter October.

A Chart which says it all.

gg
 

Attachments

  • bhp.jpg
    bhp.jpg
    138.9 KB · Views: 19
Garpal Gumnut said:
I must be the only poster interested in this tiddler. gg
Click to expand...

Certainly you are gg! Anyway, BHP have pulled out of the second phase of drilling in the Falkland Islands. They surprised onlookers as the AIM:FOGL / BHP JV has drilling prospects in the same area of water as Rockhopper Exploration that found excellent oil reserves and have seen their shares rocket from 60c to $8.50. I suppose BHP prefer compost, sorry phosphate - a bit sad really, me thinks.

What do you prefer gg, Phosphate or oil prospects?
 
Well it'll be plan C for BHP since their Potash takeover attempt failed.

Wonder what It'll be?
 
UMike said:
Well it'll be plan C for BHP since their Potash takeover attempt failed.

Wonder what It'll be?
Click to expand...

Yep Mr. Kloppers will not be happy, possibly a takeover of WPL next? It seems that BHP are running out of options and there were rumours of a takeover late last year...
 
I'm happy they got denied by the Canadians. Hopefully Kloppers doesnt really mean it and will ditch the prospect of taking over Potash.

I've said it before and my thought haven't changed, I hope they go for BG Group and grab back those massive gas reserves.
 
Commodity prices are rising, especially oil, bodes well for BHP. Should be a massive profit once again for the 1/2 yr. What numbers are people expecting
 
Last week there was an enormous rush of sellers, directed towards the support at 44.
This week there was an equally strong reaction of the buyers who have denied the previous red candle.
Therefore, buyers have regained control with the first target resistance at 47ish.

BHP BILLITON LIMITED.png

Chart weekly (courtesy of ProRealTime.com)
 
On the weekly chart, we see that the price is entered in a block of consolidation.
We are still in unptrend, but very slowly.

BHP BILLITON LIMITED.png
Chart weekly (courtesy of ProRealTime.com)
 
Top