Australian (ASX) Stock Market Forum

BHP - BHP Group

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IMHO BHP is a screaming buy and hold.
The company has a market capitalisation of around A$87 billion. Consensus estimates of net asset value (or equity) at June 30 this year is about A$40.5 billion, so the company trades at 2.2 times the value of its equity. This is another way of saying the price to book ratio is 2.2 times.
Consensus estimates tip BHP to achieve return on equity of 45 percent for the year to June 30, 2007, and over 30 percent the following year.

Paying just over 2 times book value to obtain in excess of 30 percent return on equity is a very good deal, and one rarely found in today's hyperactive markets.

BHP is cheap and attractive on other parameters, too. Cashflows are robust, contributing to a strengthening balance sheet, as debt falls and share buybacks continue. On a price-to-earnings (PE) ratio basis, BHP trades around 8.7 times 2007 consensus earnings.

Forget your pullbacks, your triangles, etc....just buy the bloody stock, sit back and relax.

al
 
Wait for the instos to sell the industrials at 20 times and move back into Hills and Rio and Woodies at low multiples as China stocks up again on Copper and Oil.

SECTOR ROTATION will be the call for the next couple of months.

Market down today on bullish leads while Hills goes north

Get set folks!
 
Fab said:
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.
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Fab, buy some Rio Tinto as well. Rio will be announcing result tomorrow, the earnings result will surprise the market. :p:
 
annalivia said:
IMHO BHP is a screaming buy and hold.
The company has a market capitalisation of around A$87 billion. Consensus estimates of net asset value (or equity) at June 30 this year is about A$40.5 billion, so the company trades at 2.2 times the value of its equity. This is another way of saying the price to book ratio is 2.2 times.
Consensus estimates tip BHP to achieve return on equity of 45 percent for the year to June 30, 2007, and over 30 percent the following year.

Paying just over 2 times book value to obtain in excess of 30 percent return on equity is a very good deal, and one rarely found in today's hyperactive markets.

BHP is cheap and attractive on other parameters, too. Cashflows are robust, contributing to a strengthening balance sheet, as debt falls and share buybacks continue. On a price-to-earnings (PE) ratio basis, BHP trades around 8.7 times 2007 consensus earnings.

Forget your pullbacks, your triangles, etc....just buy the bloody stock, sit back and relax.

al
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Agree with what you're saying, but you have to be careful when doing the price to book calcs. The A$87b market cap only accounts for the shares listed in Aus. If you take the PLC stock too, that will add approximately another A$60b to your market cap.
 
Todays AGE
http://www.theage.com.au/news/busin...all-says-survey/2007/01/31/1169919403844.html

Mineral prices to rise before fall, says survey
Nassim Khadem, Canberra
February 1, 2007

FORECASTS for commodity prices have edged higher amid expectations of a US downturn, an Access Economics report shows.

Despite warnings from Treasury that the mining boom is nearing an end, the December-quarter Minerals Monitor report suggests iron ore, gold, oil, platinum and uranium will continue to rise over the next year before falling away.

The report, which gives an overview of the world economy and the mineral price forecasts of 13 leading commodities analysts, predicts falls in lead, zinc, cobalt, nickel and copper over the next 2 ½ years.

It says the commodity price surge seen since 2003 will "take a breather" as the supply of minerals catches up with strong demand from growing economies such as China.

"A US slowdown poses less risk to commodity demand than in times past," the report says. "Although China is set to slow from here, it and other commodity-hungry nations will still drive industrial commodity demand forward at a good pace.

"Inventories are slowly being rebuilt for the likes of oil and copper and there is increasing evidence that 2007 and 2008 will see supply lift solidly, especially for some key base metals."

The report says that while iron ore prices are still rising, the consensus view of analysts surveyed is that prices will fall beyond 2009.

"The panel sees the coming fall in minerals prices as a slow burn, with most minerals expected to still be overvalued in June 2009 when compared to their long-term sustainable price."

The report says lead is now the most overvalued mineral and predicts its price will fall by 51 per cent over the forecast period of March this year to June 2009. "This large fall is largely due to the 38 per cent rise in lead prices in the December quarter," it says.

Zinc will drop by almost 50 per cent by mid-2009, cobalt will drop 46 per cent, nickel will fall almost 45 per cent and copper will dive 44 per cent. Price falls of more than 20 per cent are also expected for tin, coal, aluminium, silver, uranium and zircon. Rises are tipped for ilmenite (12 per cent) and rutile (5 per cent).

The report also provides strong upward revisions to earlier forecasts on oil, in light of the Organisation of Petroleum Exporting Countries cutting production.
 
bigdog said:
Todays AGE
http://www.theage.com.au/news/busin...all-says-survey/2007/01/31/1169919403844.html

Mineral prices to rise before fall, says survey
Nassim Khadem, Canberra
February 1, 2007

FORECASTS for commodity prices have edged higher amid expectations of a US downturn, an Access Economics report shows.

Despite warnings from Treasury that the mining boom is nearing an end, the December-quarter Minerals Monitor report suggests iron ore, gold, oil, platinum and uranium will continue to rise over the next year before falling away.

The report, which gives an overview of the world economy and the mineral price forecasts of 13 leading commodities analysts, predicts falls in lead, zinc, cobalt, nickel and copper over the next 2 ½ years.

It says the commodity price surge seen since 2003 will "take a breather" as the supply of minerals catches up with strong demand from growing economies such as China.

"A US slowdown poses less risk to commodity demand than in times past," the report says. "Although China is set to slow from here, it and other commodity-hungry nations will still drive industrial commodity demand forward at a good pace.

"Inventories are slowly being rebuilt for the likes of oil and copper and there is increasing evidence that 2007 and 2008 will see supply lift solidly, especially for some key base metals."

The report says that while iron ore prices are still rising, the consensus view of analysts surveyed is that prices will fall beyond 2009.

"The panel sees the coming fall in minerals prices as a slow burn, with most minerals expected to still be overvalued in June 2009 when compared to their long-term sustainable price."

The report says lead is now the most overvalued mineral and predicts its price will fall by 51 per cent over the forecast period of March this year to June 2009. "This large fall is largely due to the 38 per cent rise in lead prices in the December quarter," it says.

Zinc will drop by almost 50 per cent by mid-2009, cobalt will drop 46 per cent, nickel will fall almost 45 per cent and copper will dive 44 per cent. Price falls of more than 20 per cent are also expected for tin, coal, aluminium, silver, uranium and zircon. Rises are tipped for ilmenite (12 per cent) and rutile (5 per cent).

The report also provides strong upward revisions to earlier forecasts on oil, in light of the Organisation of Petroleum Exporting Countries cutting production.
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Ya, lead is good. Lead is my top pick metal for 2007.
See attached for my reasoning:
http://basemetal-trading.blogspot.com/2007/01/buy-3-lots-of-lead-virtual-trade.html
 
The bears seem to be conspicuous by their absence!
I always look forward to ducati coming along and "valuing" a stock using his unique blend of economyelitis, disanalysis and obfuscation to put things right.
 
rederob said:
The bears seem to be conspicuous by their absence!
I always look forward to ducati coming along and "valuing" a stock using his unique blend of economyelitis, disanalysis and obfuscation to put things right.
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Ducati prefers the obvious superior 'value' available in FORD

http://www.bloomberg.com/apps/news?pid=20601087&sid=a.peELHwidUY&refer=home

Going well it appears!
_____________________________________________

Are the chartists long yet?
 
BSD said:
Are the chartists long yet?
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Still short, but it was a total stuffed up mistrade unattended lack of planning and decision-making that has kept me in it!

Will be out of it tomorrow if close higher. Any thoughts what SP might do leading up to report due 7th Feb?
 
For BHP, time is on long side. Because BHP is making money every seconds! If everything stay the same, BHP should add value like $2.5 minus dividend year after year. The clock is ticking...
 
BHP is up 3.16% in london atm.

It will be interesting to see what happen in the US when i wake up tomorrow morning.. Could we see $27.00 tomorrow????

Maybe all the share buy backs have something to do with the rise? or the anticipated results due on 27 Feb 07? Or everyone decided to take the brokers advice (yeah right!)
 
steven1234 said:
BHP is up 3.16% in london atm.

It will be interesting to see what happen in the US when i wake up tomorrow morning.. Could we see $27.00 tomorrow????

Maybe all the share buy backs have something to do with the rise? or the anticipated results due on 27 Feb 07? Or everyone decided to take the brokers advice (yeah right!)
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Not so great news for those that want to get in.

Great news for those that still hold the stock.
 
rederob said:
The bears seem to be conspicuous by their absence!
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No.

Even Bears get long on the quiet... I'm not in BHP, but in some others in the sector.

But ferchrissake don't tell anyone, there are reputations to uphold here :D
 
BSD said:
Ducati prefers the obvious superior 'value' available in FORD

http://www.bloomberg.com/apps/news?pid=20601087&sid=a.peELHwidUY&refer=home

Going well it appears!
_____________________________________________

Are the chartists long yet?
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BSD
It would seem that you have neglected to do even the most basic and cursory homework.............why am I not surprised.

FORD is not Ford Motor Company which has the Ticker F
But a completely different company.

jog on
d998
 
spitrader1 said:
maybe another good day for BHP holders, should open circa 25.92. Can hear the choking of the shorts already.
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whats that sound i can hear??coughing and spluttering of shorts choking??
 
wayneL said:
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?
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Its a sign of genius...
 
I've got a $100 bet on that it falls below the $26.41 close today, first up tomorrow....there's the fun put back into trading......is there a bookie out there who wants to play that game?
dlineinvestor took $10 off me for a close above 26.35 today.....pay back for me tomorrow me hopes...lol.....
 
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