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BHP - BHP Group

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Copper rallying sharply and oil up

BHP down - difficult to understand

Does anyone else think the market is expecting BHP to launch a bid for Freeport/Phelps?
 
BSD said:
Copper rallying sharply and oil up

BHP down - difficult to understand

Does anyone else think the market is expecting BHP to launch a bid for Freeport/Phelps?
Click to expand...

BHP is overvalued, and, should they launch a bid for Freeport, or, Phelps Dodge, they would destroy huge shareholder wealth.

jog on
d998
 
BSD said:
Copper rallying sharply and oil up

BHP down - difficult to understand

Does anyone else think the market is expecting BHP to launch a bid for Freeport/Phelps?
Click to expand...


BHP would have to be silly to bid for Freeport, but they have done stranger business decisions in the past (Headland HBI, Beenup and canning half of Newmans workforce in 99 to name a few!). It would certainly not be in the interest of their Shareholders, and I am one of those :D .

As for BHP being overvalued, thats akin to them bidding for Freeport, ridiculous!. Youre sounding like a subscriber to the T3 float.
 
BSD said:
Copper rallying sharply and oil up

BHP down - difficult to understand

Does anyone else think the market is expecting BHP to launch a bid for Freeport/Phelps?
Click to expand...

Don't know what to think anymore.. :D

In the West Australian paper today



Foster’s, Rio Tinto in private equity sights
25th November 2006, 7:00 WST

Having stalked Australian companies such as Coles Group and Qantas, insatiable private equity firms with up to $US300 billion ($387 billion) to spend are now believed to have set their sights on other giants such as Telstra, Foster’s and Rio Tinto.

As investors digest the possibility of a takeover of Qantas by a consortium led by Macquarie Bank and US private equity firm Texas Pacific, the market is now considering which other companies may face a bid.

The hit list includes David Jones and the Australian Stock Exchange.

Aequs Securities institutional dealer Ric Klusman said US-based private equity firms had been targeting US companies for nearly 15 years, stripping the market of most opportunities and they were now looking at other markets, particularly Australia.

“Companies in Australia seem cheap to them,” Mr Klusman said.

Comparable US companies were trading at twice the price to earnings ratio and generating lower yields than many Australian companies which represented good buying opportunities.

“The big players are looking to grow but they can’t get their growth through organic means so they have to take out their opposition and they are prepared to do that at a higher price,” Sentinel Stockbroking chief executive Norman Robinson said.

Mr Robinson warned that many assets were overpriced and said that because of their high leverage private equity groups would be vulnerable to higher interest rates or slower economic growth.

Mr Klusman said private equity firms would not launch any hostile takeover bids which could delay the capital investment and therefore future returns.

“It has to be friendly and it has to be almost guaranteed of going through,” he said.

Foster’s remains in the frame, with its shares racing to a record high yesterday on unusually high volumes amid rumours of an imminent bid by Belgian brewer Inbev or a private equity consortium.

Another European group is also understood to be readying a tilt at paper and plastics group Amcor, with broking house Goldman Sachs JBWere working behind the scenes to get a bid up.

Mr Klusman also predicted a move would be made on the Australian Stock Exchange but said current legislation prevented majority foreign ownership.

Research director at Shaw Stockbroking Scott Marshall said the private equity groups were looking for companies that would provide a strong return down the track.

“They are looking at very strong brands and something that can be offloaded relatively easily down the track and they are looking at companies that have fallen on hard times,” he said.

“These investors have gone around the world in the last few decades acquiring assets and Australia is just the target of the month.”

Hartleys broker Ian Parker forecast there would be at least six takeover bids by Christmas, with the strong merger and acquisition activity continuing into 2007.

The recent move by Freeport-McMoRan Copper & Gold to buy out Phelps Dodge at a premium had re-rated global resource stocks by 25 to 30 per cent, sparking a spending spree by private equity groups, he said.

“This thing gets a life of its own and it starts filtering down, starting with the big quality companies, then goes to the lesser quality companies,” he said.

“It would need a major external shock to the system to stop this.”

ABN AMRO investment manager Tim Carvolth identified Telstra as the biggest sitting duck, with the recent Federal Government sell-off of Telstra shares changing the company’s fundamentals.

“Like Qantas, one of the most profitable airlines in the world, Telstra is one of the most profitable telcos in the world for its size,” he said.

TRACEY COOK and REBECCA KEENAN
 
Buying Freeport doesn't make huge sense. One mine risk in a very poor place in the world to do business. Great mine though

BHP has been avoiding the regions like Africa and Central Asia. It will be interesting to see how long this lasts with some mid cap players doing well in Africa (Congo/Zambia/Tanzania)


BHP would be better having a crack at RIO

Both have very lazy balance sheets and diversified, long mine life assets.

Rio has missed the boat so far and have left themselves exposed.

The Chinese would squeal if the big bulks joined hands - iron ore would be controlled by an even smaller cartel.

BHP et al are becoming price makers in this consolidation phase; an excellent justification for the stronger for longer club



The only way BHP is overvalued is if you think Cu, Ni and Oil are going to drop by at least 40% in the next two years.
 
The market simply "is", it doesn't always reflect fundamentals of a business or the commoditys in which it derives it's income or the outlook for said commodities on a global scale.

Many examples of this can be seen this year, last year and so on. The market is a herd that follows, it follows the lead of the big players once they have made their call and take positions, again plenty of evidence of this in recent commodities and companies in recent times. A low SP for you may an entirely different view for me, it may be my accumalate point.

I'm only interested in my outlook on certain commodities and trading stocks to my percieved targets and entering/exiting as such.

BHP at present is a strange one, despite the majority of its business interests generating historical premiums, its SP is lagging and its undervalued IMO.

I'm not at all interested what the market considers as BHP's value short term, every opportunity its sold down I'm accumalting and haven't traded them at all since April.

At some point in time positions will be taken in BHP, the herds will follow and their fundamentals will be reflected in their SP. BHP are the largest weight on the materials index.

The call was made in August on commodities, we were only a smidgen away from a Bear in my opinion, one more lower high and my opinion on BHP and materials/global outlook short term may have been different :D , its not and I'm happy with my call.

By the way BHP is only a stock which I margin on, I'm not interested in trading it and are more interested in a perhaps 30 percent profit target (with a bit of STOP safety) this financial year, should get their I reckon.
 
will we see BHP hit $24 again....

who will margin lend.... or are they worth margin lending if they dip to 25.60ish...
 
Freeballinginawetsuit said:
BHP would have to be silly to bid for Freeport, but they have done stranger business decisions in the past (Headland HBI, Beenup and canning half of Newmans workforce in 99 to name a few!). It would certainly not be in the interest of their Shareholders, and I am one of those :D .

As for BHP being overvalued, thats akin to them bidding for Freeport, ridiculous!. Youre sounding like a subscriber to the T3 float.
Click to expand...

I was 'ON THE LINE' when the brought in the coppers to 'break the line' in Newman a few years back.....I snuck up on a copper chick and whispered in her ear.....
 
You wouldn't do that to you own union...why us....3-4 years later they protest and not a single miner was brought in to quell the unrest...
I now value BHP in the low $24 mark....was high $23 estimate in my quotes previously but % interst has been accounted for now.... 3-4 months ago and you all laughed....:p:......Low $24 is almost a certainty.....:cautious:
 
pacer said:
You wouldn't do that to you own union...why us....3-4 years later they protest and not a single miner was brought in to quell the unrest...
I now value BHP in the low $24 mark....was high $23 estimate in my quotes previously but % interst has been accounted for now.... 3-4 months ago and you all laughed....:p:......Low $24 is almost a certainty.....:cautious:
Click to expand...
pacer
I do hope you are wrong.
On Monday I expect to have added BHP (again) to my portfolio.
I am hoping that I hold it for a few years, as I did the last few occasions.
 
rederob said:
pacer
I do hope you are wrong.
On Monday I expect to have added BHP (again) to my portfolio.
I am hoping that I hold it for a few years, as I did the last few occasions.
Click to expand...
I dont own any bhp shares but if had a spare 20k would certainly park it with them. I feel that the growth coming out of india and china is too easily underestimated and much rather than a fall in commodity prices we should see a consolidation. Plus at the end of the day bhp is still a target for the equity monsters who will eventually take over the planet!
 
constable said:
I dont own any bhp shares but if had a spare 20k would certainly park it with them. I feel that the growth coming out of india and china is too easily underestimated and much rather than a fall in commodity prices we should see a consolidation. Plus at the end of the day bhp is still a target for the equity monsters who will eventually take over the planet!
Click to expand...

BHP is a takeover target.....all them people putting an extra $ away in thier super funds has and will continue to create takeover targets for them super companies....what else ar they gonna do with the $$$$, take it to the Casino?

A frind of mine said today..."These super funds make you 5-15% and we're supposed to be grateful for that?....I took out my super and doubled it in a week!"......DOH!.....
 
pacer said:
BHP is a takeover target.....all them people putting an extra $ away in thier super funds has and will continue to create takeover targets for them super companies....what else ar they gonna do with the $$$$, take it to the Casino?

A frind of mine said today..."These super funds make you 5-15% and we're supposed to be grateful for that?....I took out my super and doubled it in a week!"......DOH!.....
Click to expand...

I hope it paid the Bourbon bill ;)
 
It's Snake Pliskin said:
What about the TAB? :D
Click to expand...

THAT QUESTION WAS ANSWERED A LONG TIME AGO.....

It's ok to have a punt now and then...just don't let it run your life...

I can quote the note on the back door of my friends place (which I wrote there 3 years ago IN BLACK TEXTER.........and is still there!)

BIG PUNTERS ARE BIG LOOSERS....
IT'S HARD ENOUGH PICKING YOUR NOSE,
LET ALONE A HORSE......

And I am serious for a change......:eek:
 
BSD

BHP et al are becoming price makers in this consolidation phase; an excellent justification for the stronger for longer club

The only way BHP is overvalued is if you think Cu, Ni and Oil are going to drop by at least 40% in the next two years.
Click to expand...

On what basis would you support your assertion that BHP is a price maker?
With regards to the 40% fall in price, yes, I can see that happening, it is definitely in the realms of possibility for me.

jog on
d998
http://grantmacdonald.blog.co.nz/
 
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