Australian (ASX) Stock Market Forum

BHP - BHP Group

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This week the stock makes a new high.
The last three days: only profit taking.
Daily chart.
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Alan Kohler interviewed Kloppers for about 12 minutes last week and it was broadcast on Inside Business yesterday. Link here.
 
warakawa said:
Thank you for your recommendations.

What is the difference between Montgomery's "Value Able" and university level investment books such as "investment concepts and applications" by Brailsford et al or "investments" by Bodie et al.

Is "value able" available in pdf or ehub format? What other books I should read?
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If you want to profess value investing, the BEST starting point is to read Mr. Warren Buffett's annual letters. This year I read them the fourth time and I still learned a hell lot from those words. Those are just Bible for those who are serious about investing.
Plus, you do not have to pay anything for them.
 
BHP Billiton Ltd will acquire 100% of Chesapeake Energy Corporation for US$4.75 billion (paid in cash). BHP buys a company that holds 487,000 acres of leashold with existing net production of 415 million cubic feet of natural gas and midstream assets of 420 miles of pipeline. Chesapeake will provide essential services to BHP for 12 months. The deal closes in the first half of 2012.

BHP Billiton Ltd also announced an off-market buyback of A$5 billion.
 
The off-market buy back.... how is that likely to effect the stock price? Are the last few days trades simply the lead from wall street?

(ASIC disclosure: Yes I own bhp shares hence my interest in the way they trade)
 
voigtstr said:
The off-market buy back.... how is that likely to effect the stock price? Are the last few days trades simply the lead from wall street?

(ASIC disclosure: Yes I own bhp shares hence my interest in the way they trade)
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A buy back does support the price because it is reducing the total number of shares on issue and there for increasing the piece of the pie the remaining share holders own.
 
BrightGreenGlow said:
Any idea when the buy back is on the cards? Sounds very hood for holders!
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Out of their news release:

Event - Date
Off-Market Buy-Back announcement - 22 February 2011
Cut-off date for franking credit entitlement under 45-day rule(4) - 24 February 2011
Shares quoted ex-entitlement to participate in the Off-Market Buy- Back on the ASX (shares acquired on the ASX on or after this date will not typically confer an entitlement to participate in the Off- Market Buy-Back) - 25 February 2011
Determination of eligible shareholders entitled to participate in the Off-Market Buy-Back (record date) - 3 March 2011
Completion of mail out of Off-Market Buy-Back documents to eligible shareholders - 16 March 2011
Off-Market Buy-Back tender period opens - 21 March 2011
Off-Market Buy-Back tender period closes – tenders must be received by 7.00pm (AEST) - 8 April 2011
Announcement of the final buy-back price and any scale back - 11 April 2011
Off-Market Buy-Back proceeds dispatched/credited to participating shareholders completed - No later than 18 April 2011
 
Tysonboss1 said:
BHP has been running an on market buy back for a while now, and are also conducting an off market buyback shortly.
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am I naive or is it a not to be missed opportunity: the buy back has a huge franked component and a very small capital amount:
does it mean that for CGT : we have a huge loss: capital component only minus purchase price and a huge franked income?
This sounds too good to be true
 
For some a great opportunity. Depends on your tax bracket etc.

If you're in the 0 or 15% bracket you'll be in front with the franking credit. Hence super funds will probably jump at it. In the 30% bracket and you'll be even with the franking credit, but lose a little by paying extra medicare levy.

You will get a capital loss, and it will be big for many people. But just how valuable that capital loss is will vary depending on your current/future capital gains tax liabilities and your tax bracket.

Don't forget to that the buyback is at a discounted price of between 10 and 14%. If you want to re-purchase the shares you sold in the buyback, you'll probably have to pitch in about that much more than the proceeds you got from the sale.
 
qldfrog said:
am I naive or is it a not to be missed opportunity: the buy back has a huge franked component and a very small capital amount:
does it mean that for CGT : we have a huge loss: capital component only minus purchase price and a huge franked income?
This sounds too good to be true
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I havn't seen any of the details on the break up off the offer, I don't actually hold BHP at the moment.
 
For Eureka Report subscribers, there is a very good and clear article from Tony Rumble explaining how the buyback works. If you hold BHP shares through a SMSF that is in pension mode or otherwise taxed at 0%, it's seems to be a great opportunity. It's marginal if your tax rate is at 30%. If your tax rate is higher than 30%, then it's not a good opportunity by itself.
 
Dang, I only read the ASX announcement yesterday. I would have bought more BHP to take advantage of the off market share buy back. Too late now. I'm not sure what the franking rate will be? Fully franked? If so, that's going to be great for my family SMSF (most of the fund is in pension phase).
 
Just thinking out aloud here... If I planned to take up the share buy back offer but still wanted to be exposed to this company in the long run, I would need to plan to double up my holding before the offer expiry date (assuming that in, all things being equal, the shares will be worth more after the buy back and therefore will trade higher). Then if I sell those shares that are eligible to participate in the buy-back (our current holding) I will still be left with the same exposure as we have now after the buy back.

If we elect to take the final discount price (the successful buy-back price established by the tender process) is it a guaranteed buy-back???

Depending on how deep the current pull back ends up going, this could be a real opportunity.
 
The big question for me is how many will BHP buyback?

wonder how they will scale-back..ie clean up smaller holders, or by percentage

They had a buyback in 06-07, not sure of the details

I have 2000 in my SMSF pension

To remember that the franking credits will not be recieved for over 12mths in SMSF.

Intend to offer up all, not sure when I will buy back, but want to keep my exposure roughly similar to now.

With the buyback $5B and MC 155B, that is about 3.5%

my calcs for SMSF pension:

(Using current SP $45.95) - 14% (full discount)= $39.52

returned as Capital $0.28 FF Div 39.24 Franking (39.24 x 3/7)= $16.82

Total for 0% taxpayer = $56.34 (about 23% premium)


Any thoughts?
 
BHP shares have gone ex-entitlement for the buyback. I suspect we might see a drop in share price tomorrow on open.
 
BHP - 03-03-11

Share is moving in a upward channel. the up line is its resistance and its lower is support line.

BHP-3-3-11-CHANNEL.png

in a longer term view , it has passed up the blue resistance line but couldn't pass up the red resistance line. now the blue one could play as a support line.

BHP-3-3-11-LONG.png
 
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