Australian (ASX) Stock Market Forum

BHP - BHP Group

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kid hustlr said:
Joe I assume this is worth a ban?
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From what I can gather it was some kind of misguided political point, expressed in a way deliberately intended to offend and wind others up. An infraction accompanied by a very stern warning has been issued.
 
To clarify - It wasn't intended to wind any one up. Just a very brief point that is not contradicted by reality. Given it is listed on multiple exchanges it would be less meaningful to say foreigners. The point is and I am more than happy to reiterate it that they have a record for being negligent in places where the they feel they can get away with it. I could have written that but there didn't seem to be the time to capture the perception.

Further my first instincts prove time and again to be very reliable and this is no exception. Sorry if they are too raw but that's how it roles and there is no intention to wind up offend or anything like that -

notting said:
Makes sense to me.
I hope it gets there for you.
And at least BHP holders may be a little relieved you aren't that confident about $15
31 to 27.45 is around 13%?
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The
notting said:
Makes sense to me.
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Was in support of the post suggestion it would hit $20 when it was around $28. And here we are ~ some value
 
sptrawler said:
The whole Australia down the tube thing, is a bit overdone.IMO
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I wouldn't say it's down the tube.
What I would say is that given what has happened in China over the last 40 years this thing should be in a similar position to Apple. It should be sitting on massive cash piles and effortlessly buying things like Santos, Woodside, western Areas and what ever else has done all the work and struggling with debt due to the sentiment at present.
But it isn't. It's got bugger all to show for the biggest mining boom the world has ever and will ever see, due to terrible management decisions done at the worst times.
It's a joke.
But it will not go broke.
 
notting said:
But it isn't. It's got bugger all to show for the biggest mining boom the world has ever and will ever see, due to terrible management decisions done at the worst times.
It's a joke.
But it will not go broke.
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That's not entirely true... after this boom we are left with:
- Abundance of capital equipment
- Huge capacity of future output
- Very high salary packages for the mining industry
- Lots of empty housing in Port Hedland.

Surely some of the above are going to be very beneficial when Men start to colonise and develop Mars.
 
skc said:
That's not entirely true... after this boom we are left with:
- Abundance of capital equipment
- Huge capacity of future output
- Very high salary packages for the mining industry
- Lots of empty housing in Port Hedland.

Surely some of the above are going to be very beneficial when Men start to colonise and develop Mars.
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Surely indeed true.
But what was blatantly obvious about China for years!!!!! Was that commodities were heading into a major correction, so why buy into China leverage at the top? Unbearable stupidity. Why not, do it now as illustrated. This is obvious to me it should have been so obvious to those being paid a fortune to manage and foresee such things. That is their job!
Global oil sentiment is heavily geared to China too.

Perhaps you can now understand why I was so motivated to be screaming about China from the rooftops to the goons who have a pretty big hand on our economy when it counted, not after the fact. Oi
 
BHP balance sheet in 2011 still looked very good, only about 15% net gearing.

They then increased long term debt from $10B to $35B in the last 4 years.

I assume alot of that was buying Oil / Gas Assets.
 
notting said:
They've been killing colored people again.
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The way I saw this was, "Hello, notting's got the goss on something I don't know about."

It sure panned out that way as very soon we all heard about the Samarco tailings dam collapse.

From the SMH:

The fallout from the Brazilian mudslide disaster is deepening for BHP Billiton after the emergence of a two-year old report warning of design flaws in the tailings dam system at its iron ore joint venture that unleashed a deadly mudslide last week.

Read more: http://www.smh.com.au/business/mini...-in-brazil-20151111-gkwm86.html#ixzz3rFDVY8Mu
Follow us: @smh on Twitter | sydneymorningherald on Facebook

Further, I tend to agree with notting's analysis that the Big Australian, instead of having mountains of cash, has thrown good money after bad giving the appearance that the company is indeed run by "clowns".

Typical really of corporate greed (aka the influence of "Wall Street") overruling plain old common sense. Maybe this is just another example of karma and just deserts I say. I'm sure that both Vale and BHP wished they'd spent the few odd mill to shore up or whatever needed doing to the tailings dam instead of having to deal with the current fallout.

Oh, and if it was a seismic event, surely they would've been able to model that into the design plans and been able to mitigate the extent of damage should such an event occur?
Clowns to the left of me, jokers to the right...
 
notting said:
To clarify - It wasn't intended to wind any one up. Just a very brief point that is not contradicted by reality. Given it is listed on multiple exchanges it would be less meaningful to say foreigners. The point is and I am more than happy to reiterate it that they have a record for being negligent in places where the they feel they can get away with it.
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Perhaps the young ones have never heard of Ok Tedi?

https://en.wikipedia.org/wiki/Ok_Tedi_Mine
 
I wrote about my fair values a while ago, going to update them:

BHP @ $21 fair value when Oil and Iron Ore are $65.
BHP @ $16 fair value when Oil and Iron Ore are $60.
BHP @ $12 fair value when Oil and Iron Ore are $55.

- Few other variables involved but they are the main ones.
- Using PE 13 x EPS.
- Ignoring Dividend Yield.

My personal view from looking at past commodity cycles is that it'll likely take until the 2020s before Oil and Iron Ore start to average $65 for a sustained period. I think $55 is possible sooner, but then it correlates with my fair value estimate of $12 and the market won't do that due to dividend.
 
shouldaindex said:
I wrote about my fair values a while ago, going to update them:

BHP @ $21 fair value when Oil and Iron Ore are $65.
BHP @ $16 fair value when Oil and Iron Ore are $60.
BHP @ $12 fair value when Oil and Iron Ore are $55.

- Few other variables involved but they are the main ones.
- Using PE 13 x EPS.
- Ignoring Dividend Yield.

My personal view from looking at past commodity cycles is that it'll likely take until the 2020s before Oil and Iron Ore start to average $65 for a sustained period. I think $55 is possible sooner, but then it correlates with my fair value estimate of $12 and the market won't do that due to dividend.
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I like your fair value idea, what information do you derive it from?
 
BHP now flirting with levels it fell to at the worst of the GFC.
BHP is all about China as is oil and other commodities which are all pretty much there too.

So if the world is no longer in a crises then on those numbers there is clearly a problem somewhere.

It's not a soft landing.

Remember that up until now they have all been saying consumption would still increase all be it at a slower rate. It's shrinking.

At least RIO has been well managed enough over the last few years to be able to be doing a buy back.

However it is still looking vulnerable and needs to kick on up from here which is looking unlikely!
 

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My thoughts / predictions:

The BHP cheap narrative is going to get more popular as BHP gets into the $15-$19 range, because anyone can see it's a lot lower than before and have an opinion. But if you do the analysis, the numbers show the financials are still terrible and SP direction is justified.

Oil fundamentals are primed to try target $32 in the coming months, might not but there's a lot of reasons why it won't die wondering!

Can't see Iron Ore doing anything anytime soon, so declining or steadying for the long term @ $50 and below.
 
shouldaindex said:
My thoughts / predictions:

The BHP cheap narrative is going to get more popular as BHP gets into the $15-$19 range, because anyone can see it's a lot lower than before and have an opinion. But if you do the analysis, the numbers show the financials are still terrible and SP direction is justified.

Oil fundamentals are primed to try target $32 in the coming months, might not but there's a lot of reasons why it won't die wondering!

Can't see Iron Ore doing anything anytime soon, so declining or steadying for the long term @ $50 and below.
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I do hold a little bit of BHP and thought I'd check to see what the Cyclically Adjusted P/E ratio was.

Came out at about 8.5, maybe a bit higher if I had calculated inflation more conservatively (just used December CPI reading for each year). FWIW.
 
I think the past 10 years saw Iron Ore and Oil at about $100 each, which is key input in reaching the C, A, E in the 8.5 CAPE.

I know the purpose of CAPE is to neutralise those sorts of things, but think that'd be dangerous for commodities.
 
AGM today.

My belief is that they'll use Brazil as a way out of their dividend (sooner or later). That will solve 2 problems at once, pay the compensation and net save in cash from dividends.

Once that occurs $15.

Keep in mind current forecast EPS is 50c so even then there is premium you are paying for commodity price IE. require +$10 in Oil and Iron Ore to achieve an average PE.
 
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