BHP - BHP Group

[McCoy Pauley]

BHP - 03-03-11

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

View attachment 41699

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.

View attachment 41698

I would like to see some more charts, iced earth, if you have the time and inclination. I have a gut feeling that BHP might be close to going through the blue line marking the bottom of the trading range on your first chart above.

 

[Gareth]

Re: is there any point in buying BHP shares?

each shares cost $46, dividend is only 45-48c twice a year, that's return of around 2.1%. what is the point that's lower than savings account.

Saw the following on the ASX website and thought it may help in the question above

"3.Typically, the resources sector pays a dividend yield below the broader market, because many such companies re-invest their earnings to fund projects and focus on providing shareholders with capital growth."

For the full article go to the following:

http://www.asx.com.au/resources/20110310_ten_top_dividend_stocks_for_2011.htm

 

[drlog]

Re: is there any point in buying BHP shares?

Saw the following on the ASX website and thought it may help in the question above

"3.Typically, the resources sector pays a dividend yield below the broader market, because many such companies re-invest their earnings to fund projects and focus on providing shareholders with capital growth."

For the full article go to the following:

http://www.asx.com.au/resources/20110310_ten_top_dividend_stocks_for_2011.htm

It's simple enough to understand - If you had bought BHP in 2000, you would have paid, say, $9 with a 26c unfranked dividend - that's about a 2.9% yield. If you had held BHP up to now, your yield would be about 7.1% bank equivalent (including franking). While that should be an ok yield, you would also have a whopping capital appreciation (380%).

By the company holding on to profits and reinvesting them, the shareholder is much much better off than if the company just paid out a larger dividend. This will always be the case with a company that is able to generate high returns on reinvested capital like BHP.

Now if the company is unable to generate high returns on additional capital, they should pay out higher dividends - JBH in a few years comes to mind?

 

[iced earth]

BHP-08 August 2011:

BHP could not passed up the $50.00 (which was the previous peak and resistance level) .now the upward channel has been broken down and the target is around $32.00. But from the Fibo levels, the first support line will be around $35.00 (Fibo 50%) and then around $32.00 (Fibo 32.8%) which is the target of the channel too



From the 20 days EMA , momentum and MACD the sell signal has been sent. Until buy signal not being seen, we cannot be sure about continuous bullish trend.



Also from this picture we could see the bullish Head & Shoulders with the target again around $32.00

 

[robusta]

Bought some BHP today @ $35.08, got to love a company that makes investments today to pay off in 20 years and was making those same sort of investments 20 years ago.

 

[BrightGreenGlow]

Bought some BHP today @ $35.08, got to love a company that makes investments today to pay off in 20 years and was making those same sort of investments 20 years ago.

If I didn't buy a house a few weeks ago I would be all over these.... however thanks to AUT I had a massive deposit. However, any awesome opportunity for any stock at the moment and BHP is no exception!

 

[panikhide]

Bought some BHP today @ $35.08, got to love a company that makes investments today to pay off in 20 years and was making those same sort of investments 20 years ago.

Robusta: That sounds too good to be true. You must have picked and bought at the absolute bottom of yesterday's trading. Was this the only parcel of BHP shares you have bought during the downturn or did you also pick some up at $39, $38 and $37 as well?

 

[Garpal Gumnut]

While I admire those who bought BHP yesterday, it amazes me how sentiment can change in three to four days.

Looking longer term, I will buy BHP at $32 and $23, and still may make a loss initially on my long term buy of this great stock.

There is little support for yesterday's price at present, whereas the above 2 prices have at least given support/resistance in the past.

It's swingin in the wind.

gg

 

[robusta]

Robusta: That sounds too good to be true. You must have picked and bought at the absolute bottom of yesterday's trading. Was this the only parcel of BHP shares you have bought during the downturn or did you also pick some up at $39, $38 and $37 as well?

It had to happen eventually, I have been buying all through the crash and with my last lot of capital I threw it at TGA and BHP. It is the first time I have bought BHP but I intend to hold this parcel for a long time. I think the price went to $34 something yesterday morning.

While I admire those who bought BHP yesterday, it amazes me how sentiment can change in three to four days.

My sentiment has not changed I have been buying into the market all through the last 2 1/2 weeks.

https://www.aussiestockforums.com/forums/showthread.php?t=23106&highlight=robusta

Looking longer term, I will buy BHP at $32 and $23, and still may make a loss initially on my long term buy of this great stock.

There is little support for yesterday's price at present, whereas the above 2 prices have at least given support/resistance in the past.

It's swingin in the wind.

gg

I guess that is the difference I do not know anything about support/resistance I just think BHP is worth closer to $50.00 at the moment and more in the future. It could well drop to $32 or $23 but it will make no difference to me unless I have more capital available to buy some more.

 

[RandR]

the results just come in ... and it looks impressive, appears above analyst forecasts .. profit is 23 billion (us dollars) dividend up 22%. operating cash flow of 30 billion

 

[Tysonboss1]

, it amazes me how sentiment can change in three to four days.

Yeah it sure can, especially when dealing in a commodity producer such as BHP.

I mean Bhp ( as of last years annual report ) only had circa $10 / share in assets. However obviously people are prepared to pay $40 for those $10 of assets when they are generating a 40% return on those assets and reinvesting the bulk of the profits back into creating more assets that will generate 25% - 40%.

However, If a big stick did get caught in the spokes of the global economy and commodity prices halved, Bhp return on assets could drop to 15%, and not many people would want to pay $40 for $10 worth of assets that only earn 15%.

But, obviously no one knows the future, we just have opinions. So if the market starts pricing in very low commodity prices and the stick doesn't end up getting caught in the spokes then you may do very well indeed to buy this stock at current prices and just hold.

Disclaimer- I have purchased BHP recently, and would take another parcel if prices dropped. I may even sell a put or two if the premiums are attractive.

 

[robusta]

Bought some BHP today @ $35.08, got to love a company that makes investments today to pay off in 20 years and was making those same sort of investments 20 years ago.

Robusta: That sounds too good to be true. You must have picked and bought at the absolute bottom of yesterday's trading. Was this the only parcel of BHP shares you have bought during the downturn or did you also pick some up at $39, $38 and $37 as well?

Wow what a difference a few weeks makes in this market. Friday close $35.55. IMO prices will be even cheaper on Monday, any takers?

 

[skyQuake]

Wow what a difference a few weeks makes in this market. Friday close $35.55. IMO prices will be even cheaper on Monday, any takers?

Dearer imo. Even with copper coming off, closed 34.78 in the states. Much dearer hopefully

 

[Tysonboss1]

the Olympic dam expansion has been approved by state government, that's pretty good news, more copper, uranium and gold for us

 

[humblejunior]

the Olympic dam expansion has been approved by state government, that's pretty good news, more copper, uranium and gold for us

Dear all
I am new to shares and this forum.My first Post in ASF.Having observed the stock market from the side lines,( busy buying my first home), I finally managed to take the plunge and bought some BHP shares( 500) @ 35.08AUD last week. My first temptation is to sell them when they reach 38 or so for a small profit.What do people think. I am sorry if I should not be asking these questions.It is going to be a steep learning curve for me as all technical stuff that i read in the forum is going over my head and I should probably start reading some basic threads
The olympic dam expansion will take a long time to yield results( profits) won't it ?

 

[drlog]

Dear all
I am new to shares and this forum.My first Post in ASF.Having observed the stock market from the side lines,( busy buying my first home), I finally managed to take the plunge and bought some BHP shares( 500) @ 35.08AUD last week. My first temptation is to sell them when they reach 38 or so for a small profit.What do people think. I am sorry if I should not be asking these questions.It is going to be a steep learning curve for me as all technical stuff that i read in the forum is going over my head and I should probably start reading some basic threads
The olympic dam expansion will take a long time to yield results( profits) won't it ?

Welcome humblejunior! I think you have made an excellent first purchase. If you are looking at investing then I would hold long (I do hold BHP long). IF you are looking at trading then you may want to take some quick profits if they do rally to 38 in the near future.

I value BHP above $50 with the current consensus forecasts but there is definite commodity price risk with BHP. However, they are diversified. As for the olympic dam's earnings increase, it will take some time for it to come online but the market is generally forward looking. BHP generally has many projects coming online at any time so this is nothing unusual. As someone from SA, I think this is more of a SA news story

 

[Tysonboss1]

As for the olympic dam's earnings increase, it will take some time for it to come online but the market is generally forward looking. BHP generally has many projects coming online at any time so this is nothing unusual.

Yes they do,

The project pipeline is always steadily expanding production through various new projects and expansions, However this Olympic Dam Expanision Dwarfs Almost all thier other projects, $30B is a very, very large investment, Telstra Is worth $38B. Any time a company can deploy $30B and have a decent chance of earning 25% return is a good time for those shareholders.

 

[Tysonboss1]

Dear all
1, I am new to shares and this forum.My first Post in ASF.Having observed the stock market from the side lines,( busy buying my first home),

2, I finally managed to take the plunge and bought some BHP shares( 500) @ 35.08AUD last week. My first temptation is to sell them when they reach 38 or so for a small profit.

3, What do people think. I am sorry if I should not be asking these questions.It is going to be a steep learning curve for me as all technical stuff that i read in the forum is going over my head and I should probably start reading some basic threads

4, The olympic dam expansion will take a long time to yield results( profits) won't it ?

1, Hey Mate, Welcome to ASF.

2, Congratulations on taking the first step, BHP is certainly a very good company, and the price you paid is a good price compared to their earning potential. I guess you have to ask yourself whether you are an Investor or a Trader. If your an Investor and you know BHP is a excellent company, why sell at $38.

3, I think you should learn as much about investing and trading as you can, and decide which path you will go down, If you are an investor, focus on buying a basket of good companies at fair prices and hold them and you will do well over time.

4, Yes, But if you are a longterm investor what is important is their project pipeline as a whole, there will be projects coming on line this year that were started 2 years ago, What you want to know is that they are steadily investing retained $$$ into new projects that will earn high returns, Olympic dam expansion will be able to take about $30B of capital, thats a great project to have in the pipeline.

 

[Tysonboss1]

Humble Junior,

I guess what I was trying to say was,

When you Bought your shares in BHP, you bought part ownership into a diversified portfolio of long life, low cost producing mines. Those mines produce alot of cash some of which BHP will will pay to you every 6 months and the rest they will try and invest for you back into more projects, when they have more cash than they can invest into projects for you they will buy back shares increasing you stake in the company.

Obviously as long as they continue to earn solid cash flow, and invest this cashflow into project earning high returns on equity, and return excess cashflow back to investors ( dividends and buybacks ) the longer to hold the more value gets built up in each share, So why would you want to sell for a quick profit.

 

[humblejunior]

Welcome humblejunior! I think you have made an excellent first purchase. If you are looking at investing then I would hold long (I do hold BHP long). IF you are looking at trading then you may want to take some quick profits if they do rally to 38 in the near future.

I value BHP above $50 with the current consensus forecasts but there is definite commodity price risk with BHP. However, they are diversified. As for the olympic dam's earnings increase, it will take some time for it to come online but the market is generally forward looking. BHP generally has many projects coming online at any time so this is nothing unusual. As someone from SA, I think this is more of a SA news story

Dear Drlog
Thank you so much for the feedback.
It appears that there are definitely some good times to look forward to.
Meanwhile I will keep myself busy reading ...
Thanks again.