BHP - BHP Group

reece55 · 24 January 2007

BSD said:
When does the money flow from Australia's excessively expensive industrials to the cheap miners?

Soon methinks.

Looks like the bearish analysts who downgraded and put $26.50 price targets on BHP based on short term momentum are going to have to eat a **** sandwich and wheel out the upgrades.

HAHAHAHA BSD...... You are right on the money with regards to the analysts...... And I completely agree that almost every industrial in Australia at present is ridiculously overvalued, but that is the market as they say!

As for BHP - I wouldn't be counting my chickens yet - I still await a move above 26.50 on high vol to enter which IMO will remove the bearish hang on the stock. Todays action was great, but I am still on the sidelines here until I see the takeoff. But to those who entered at the lows in 24, you would be setting pretty now!

Cheers

hector · 24 January 2007

spitrader1 said:
plenty

today was options expiry

the market is closed friday

Thanks spit1,

Might be closing out tomorrow to stop the bleeding. A bit to think about in the morning.

Got to take a look at why I stayed with a dumb trade for so long! It has taken 2 good trades to cover this.

Cheers, hector

steven1234 · 25 January 2007

London is up 2.24% atm. Could we see $26.50 tomorrow????

time for bed now

wayneL · 25 January 2007

BSD said:
Hills up another 2.4% in London at the moment.

When do the chartists cover the shorts?

$26?

$28?

and when do they go long?

What on earth makes you think all chartists are short? This is just the sort of presumption which blows away your credibility.

I guarantee you at least half will be long.

rederob · 25 January 2007

wayneL said:
What on earth makes you think all chartists are short? This is just the sort of presumption which blows away your credibility.

I guarantee you at least half will be long.

I guarantee that you can't guarantee that.
And, I can warrant that.
That's the long and the short of it.
Unless you call it different, or put it another way - some options?

wayneL · 25 January 2007

wayneL said:
What on earth makes you think all chartists are short? This is just the sort of presumption which blows away your credibility.

I guarantee you at least half will be long.

BSD

Furthermore, what makes you think there are not at least some fundies who are short.

Sometimes you do great posts, at other times non sequiturs abound. Your antagonism towards charting seems a bit illogical. Why?

BSD · 25 January 2007

Plenty of non-chartists short Wayne.

Heck - I dont mind getting short from time to time.

I have just seen the greatest "no brainer short" based on all sorts of charts get nailed and was wondering when the chartists cover or go long.

Someone said $26.50 - fair enough.

The fundamentalists that are short (Ducati) wont be switching to longs so it is not an issue. If you are talikng about fund managers, yes, heaps of smarty hedge fund types were also short focussing on short term momentum as opposed to cashlow.

I even bagged the fundamental analysts in that post - if I was going to bang on about chartists, I would have at least mentioned a moon phase or geometrical pattern

We might go back to sub$25 again - this rally could be the noise of shorts covering .

Assuming nothing changes in Chindia, I will again be a buyer at those levels.

Chops. what do you mean saying BHP was 'articifially bolstered'?

Would love to meet the guys who can manipulate BHP - had they sold a monster bunch of puts or something?

Up 2.7% in London

wayneL · 25 January 2007

BSD said:
Plenty of non-chartists short Wayne.

Heck - I dont mind getting short from time to time.

I have just seen the greatest "no brainer short" based on all sorts of charts get nailed and was wondering when the chartists cover or go long.

Someone said $26.50 - fair enough.

The fundamentalists that are short (Ducati) wont be switching to longs so it is not an issue. If you are talikng about fund managers, yes, heaps of smarty hedge fund types were also short focussing on short term momentum as opposed to cashlow.

I even bagged the fundamental analysts in that post - if I was going to bang on about chartists, I would have at least mentioned a moon phase or geometrical pattern

We might go back to sub$25 again - this rally could be the noise of shorts covering .

Assuming nothing changes in Chindia, I will again be a buyer at those levels.

Chops. what do you mean saying BHP was 'articifially bolstered'?

Would love to meet the guys who can manipulate BHP - had they sold a monster bunch of puts or something?

Up 2.7% in London

My point is that there are 1001 ways to read... and trade a chart. Taking BHP for instance; there is quite a logical long trade at around 37.50 - 38.00 (NYSE) based on monthly pivot levels... with several ancillary crutch... errr, I mean indicators as backup.

Add to that a few amateur fundamentals (commods bouncing) and it's a pretty tidy looking swing trade long.

Cheers

Disclaimer: I do not hold BHP.

scsl · 25 January 2007

Costs going up left, right and centre but output's up...

MELBOURNE (Dow Jones)--BHP Billiton (BHP) Thursday unveiled further cost blowouts and delays at major projects, highlighting the pressures affecting miners around the world.
But the global miner also posted healthy production figures that reassured analysts BHP will report a record first half profit above US$6 billion early next month. With a recent 9.5% price hike struck during talks with Chinese steel mills, and citing continuing strong demand, the company achieved record second quarter and first half output from its key Australian iron ore operations.
Analysts had expected cost increases as BHP starts new projects in an overheated mining industry, with the share price rising 0.5% to end at A$26.02, off a high of A$26.35. Last year the company acknowledged significant cost pressures facing its Ravensthorpe nickel mine in Western Australia, with the original outlay doubling to US$2.2 billion and a delayed start date.
BHP revealed Thursday that the price tag of its Atlantis South oil and gas field in the Gulf of Mexico is now likely to reach US$1.5 billion, up from the previous estimate of US$1 billion. Both the US$850 million Neptune development in the Gulf of Mexico and the US$600 million Stybarrow project off the coast of Western Australia face cost pressures, it added.
The company's share of the cost of expanding the Alumar alumina refinery in Brazil has also blown out 40% to US$725 million with production delayed from mid 2008 to the second quarter of 2009. It also said the cost of expanding the Yabulu nickel refinery in Queensland is up 20% to US$556 million.
BHP spokeswoman Samantha Evans said while costs are under pressure, the company is still boosting output and taking advantage of high commodity prices.
"We have managed to achieve record production at a time when the market is very overheated," she said. "While costs are increasing, we are driving volume growth to increase output into a tight market."
ABN AMRO analyst Rob Clifford said it is no surprise to see BHP's costs on the rise. "It is kind of disappointing but not unexpected," he said.
Clifford said BHP continues to do a good job of lifting output, with the quarterly production results marginally ahead of his forecasts.
Iron ore output for the December quarter reached 25.37 million metric tons, up 11% on the year ago period, and rising 9% in the first half to 49.57 million tons.
The US$1.5 billion expansion of iron ore operations in Western Australia remains on time and budget but the work is causing some disruptions, including the suspension of the Goldsworthy ship loading operations.
Macquarie analyst Brendan Harris said the quarterly production figures are solid but will have little impact on profit forecasts.
"I was pleased with the iron ore operations, they have stepped up and managed to more than offset the decline from Goldsworthy," he said.
BHP said the retreat in copper prices is set to have an impact on the bottom line, with the finalization of pricing of copper sales to cut first half earnings by US$220 million.
Copper production for the quarter was 300,700 tons, in line with the previous corresponding period but up 20% on the September quarter when industrial action at Escondida in Chile caused disruptions.
Nickel output for the quarter was 48,300 tons, easing 1% from the previous corresponding period.
Uranium output from the Olympic Dam mine in South Australia tumbled 25% in the first half due to variable ore grades and unscheduled maintenance.

UMike · 26 January 2007

BSD said:
We might go back to sub$25 again - this rally could be the noise of shorts covering .

Assuming nothing changes in Chindia, I will again be a buyer at those levels.

I sold mine and be happy to reinvest around the 24 mark.

BSD said:
Chops. what do you mean saying BHP was 'articifially bolstered'?

Would love to meet the guys who can manipulate BHP - had they sold a monster bunch of puts or something?

I'd love to meet them also :lol:

Ken · 26 January 2007

I look at Telstra as defensive, and BHP and RIO as resources....

Today telstra down

BHP up....

Not everything can keep going up at once.

BHP still a long way off all time highs.

The choppyness of BHP was predicted.

Play the game the best way you know how.

ducati916 · 26 January 2007

Last year the company acknowledged significant cost pressures facing its Ravensthorpe nickel mine in Western Australia, with the original outlay doubling to US$2.2 billion and a delayed start date.
BHP revealed Thursday that the price tag of its Atlantis South oil and gas field in the Gulf of Mexico is now likely to reach US$1.5 billion, up from the previous estimate of US$1 billion. Both the US$850 million Neptune development in the Gulf of Mexico and the US$600 million Stybarrow project off the coast of Western Australia face cost pressures, it added.
The company's share of the cost of expanding the Alumar alumina refinery in Brazil has also blown out 40% to US$725 million with production delayed from mid 2008 to the second quarter of 2009. It also said the cost of expanding the Yabulu nickel refinery in Queensland is up 20% to US$556 million.

Higher costs will impact BHP's margins, returning them closer to their historical average.

That means, if, COG's returns to 0.55, from the recent 0.50 and in addition falling prices decrease Revenues, we can expect to see a shrinkage in the margins from 31.5% to 22.6%

This is a huge drop.
Margins should be fairly stable over time, large deviations are always evidence for close analysis. An almost 10% shrinkage would be fatal to BHP's share-price

"We have managed to achieve record production at a time when the market is very overheated," she said. "While costs are increasing, we are driving volume growth to increase output into a tight market."

And what is the golden rule?
The best cure for high prices is....................high prices.
Increased supply, will reduce price, thus leading to surplus production, at a high cost, in a falling price market...............boom, bust.

BHP said the retreat in copper prices is set to have an impact on the bottom line, with the finalization of pricing of copper sales to cut first half earnings by US$220 million.
Copper production for the quarter was 300,700 tons, in line with the previous corresponding period but up 20% on the September quarter when industrial action at Escondida in Chile caused disruptions.

Higher production, lower prices = higher costs, lower margin on Revenue's.
Ugly scenario.

Increased maintenance spending................
BHP seriously underspent on maintenance in the past 18mths.
This underspend added to, and inflated Net Profits, and now is coming back to haunt them.

The technical bounce from $24.00 as previously called [due to shorts covering] will run out of steam, you need some committed buyer's to push the price up higher.............based on the fundamentals, they [buyer's] will be in short supply.

With world markets getting a little nervous due to the extended run, nice big liquid shorts like BHP would be ideal candidates for some circa $27.00 - $26.70

jog on
d998

haemitite · 26 January 2007

Ducati,

You've confused capital cost with operating costs.

And why are capital costs increasing - well mainly due to the resources boom. Probably a good thing for a mining company wouldn't you think?

Iron Ore up 9.5%, Nickel at record highs, coking coal over $100/t and copper way above long term expectations. Volumes also on the up.

But you would hardly buy them at $25 given you passed over them at $8.

chops_a_must · 26 January 2007

BSD said:
Chops. what do you mean saying BHP was 'articifially bolstered'?

Share buy back. Would have been better off paying a dividend that was not akin to a joke.

haemitite · 26 January 2007

chops_a_must said:
Share buy back. Would have been better off paying a dividend that was not akin to a joke.

If a share buyback does bolster the share price then its delivered real value for share holders as intended.

GRTRADER · 26 January 2007

I heard there was meant to be another buy back this year? Anyone know if that is true?

BREND · 26 January 2007

I'm a buyer of BHP recently, and I believe that its earnings will surprise the market.

BHP share price had fallen due to fall in copper price, but BHP has a diversified portfolio. In addition, I believe copper price is reaching a bottom soon. So as copper price rises, it may lead BHP share price up again.

According to my model, BHP is currently 50% undervalued.

Fab · 27 January 2007

BREND said:
I'm a buyer of BHP recently, and I believe that its earnings will surprise the market.

BHP share price had fallen due to fall in copper price, but BHP has a diversified portfolio. In addition, I believe copper price is reaching a bottom soon. So as copper price rises, it may lead BHP share price up again.

According to my model, BHP is currently 50% undervalued.

I hold BHP too and I am very disappointed that it is not moving higher faster compared to other pure mine players. A lot of people seems to be expecting BHP to reach the $30 mark soon but it is just not happening at the moment. I can't help to top up so when it gets to the $24 - $24.50 mark it is too much of a bargain to me then.

Mofra · 31 January 2007

Shanghai Copper Rises on Supply Disruption Risk, Falling Stocks

http://www.bloomberg.com/apps/news?pid=20601012&sid=ay71JdvHyMMo&refer=commodities

Jan. 31 (Bloomberg) -- Copper futures in Shanghai rose as labor disputes at mines in Chile, the world's largest copper producer, threatened to disrupt supplies, and global stocks of the industrial metal dropped.

A union at BHP Billiton Ltd., the world's biggest mining company, voted to strike at Chile's Cerro Colorado copper mine in protest over wages, union president Mario Yanez said Jan. 30. Supply disruptions helped prices gain 17 percent in the past year.

``Copper has fallen to a critical point where news of possible supply disruptions can help change the direction,'' said Li Ling, an analyst at Minmetals StarFutures co., today.

Could hurt BHP short term - although I'm bias with a Feb bearish call spread on BHP

UMike · 31 January 2007

Mofra said:
.....
Could hurt BHP short term - although I'm bias with a Feb bearish call spread on BHP

Hope so.....

I want back in.

BHP - BHP Group

reece55

hector

steven1234

wayneL

VIVA LA LIBERTAD, CARAJO!

rederob

wayneL

VIVA LA LIBERTAD, CARAJO!

BSD

wayneL

VIVA LA LIBERTAD, CARAJO!

scsl

UMike

Klutzing in Thai

Ken

ducati916

haemitite

chops_a_must

Printing My Own Money

haemitite

GRTRADER

BREND

Fab

Mofra

UMike

Klutzing in Thai

BHP - BHP Group

VIVA LA LIBERTAD, CARAJO!

VIVA LA LIBERTAD, CARAJO!

VIVA LA LIBERTAD, CARAJO!

Klutzing in Thai

Printing My Own Money

Klutzing in Thai

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Privacy & Transparency