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BHP - BHP Group

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Re: BHP - Price weakness

Just make sure you are prepared and don't get caught or shaken out if and when they throw a 'dummy'

Cheers
Happytrader
 
Re: BHP - Price weakness

I noted brokers downgraded BHP after the GOM update, so instos shorting it?
 
Re: BHP - Price weakness

BHP and CBA are Leader stocks and as such are always worth the effort of close observation and analysis. Owning these stocks appears to be the equivalent of owning a luxury vehicle. Perception in the market and anywhere else is everything if you get my drift.

Cheers
Happytrader

Disclaimer
These could be the meanderings of a lunatic. Do your own research and make market truths your own.
 
Re: BHP - Price weakness

RichKid said:
I noted brokers downgraded BHP after the GOM update, so instos shorting it?
Click to expand...


Approved net Short Sale positions as at end of day 08-Dec-2005


Reported Short Limit % short

Short Vol

BHP BHP BILLITON LIMITED 4,627,232 358,731,040 .12%
 
Ok all you fundamentalists

Anyone able to explain why SP is down after BHP's profit announcement?
If the profit was already factored into the price because everyone already knew what the profit was going to be before it was announced then that should be a neutral affect on the SP ??!!

Also they announced a buyback which I thought was usually a positive bit of news- so the SP should go up. If already factored in then there must have been some inside trading (duh!).

Please explain.
 
dutchie said:
Ok all you fundamentalists

Anyone able to explain why SP is down after BHP's profit announcement?
If the profit was already factored into the price because everyone already knew what the profit was going to be before it was announced then that should be a neutral affect on the SP ??!!

Also they announced a buyback which I thought was usually a positive bit of news- so the SP should go up. If already factored in then there must have been some inside trading (duh!).

Please explain.
Click to expand...

Hi Dutchie

You've said if the profit result had already been factored in THEN THAT SHOULD BE A NEUTRAL EFFECT ON THE SP. Yes, I'm sure we'd all agree.
However, time after time when this happens the SP drops.
Then the resource sector in general is less popular right now.
Have also been thinking that their as yet unresolved role in the Oil for Food affair could be creating some negative sentiment.

Julia
 
Thanks for the reply Julia. Yes BHP's involvement in the food for oil scandal may affect the SP - but I don't think so (maybe for a day or two).

A few executives may pay something (fired, demoted), BHP may get fined and/or reprimanded (by who??). But the affect on final year profits - zilch!

Am I being too cynical or is that how the world works these day??
 
Hi dutchie (pauline) ;)

dutchie said:
Ok all you fundamentalists

Anyone able to explain why SP is down after BHP's profit announcement?
If the profit was already factored into the price because everyone already knew what the profit was going to be before it was announced then that should be a neutral affect on the SP ??!!

Also they announced a buyback which I thought was usually a positive bit of news- so the SP should go up. If already factored in then there must have been some inside trading (duh!).

Please explain.
Click to expand...

I think there are a number of factors affecting BHP's share price atm and remember that markets are forward looking and so as they say in the 'classics', past performance is no guarantee of future performance..

A bit of the old buy on rumour, sell on fact syndrome is maybe one of them.

Also oil has dropped back below $60 and with the Saudis saying they will increase production or refining capacity (can't remember which) in the next few years maybe $70ish will be a peak for the forseeable future.

Another reason, if global economies are expected to have lower growth (I think China has a bit to run yet though) in the next few years then the demand for resources will be less.

With our market at ATH's there is more volatility nowadays due to the tug o' war between profit takers and 'bargain' hunters. Personally I don't see any real bargains at the big end of the market atm.

cheers

bullmarket :)
 
dutchie said:
Ok all you fundamentalists

Anyone able to explain why SP is down after BHP's profit announcement?
If the profit was already factored into the price because everyone already knew what the profit was going to be before it was announced then that should be a neutral affect on the SP ??!!

Also they announced a buyback which I thought was usually a positive bit of news- so the SP should go up. If already factored in then there must have been some inside trading (duh!).

Please explain.
Click to expand...

From what I've seen, yes the profit result was already factored into the SP. I think what didn't please the analysts was increasing costs from getting the stuff out of the ground. All the miners are getting hit with higher input costs (labour, contractors ,machinery etc). But due to record prices - margins are still increasing, so BHP has suggested as margins increase they will pay whatever it takes to get their stuff out and sell it.

I think a pivotal point maybe the Iron Ore contract prices negotiated with China. How much of a rise will they get?? if they don't get much of a rise, the market may see it as a signal for a top in commodity prices.

But then again this $86 bill company is making almost $9 bill annual profit, so its trading at a PE ~ 10. I'm still deciding whether money in BHP would present better value than money in the bank??
 
dutchie said:
Ok all you fundamentalists

Anyone able to explain why SP is down after BHP's profit announcement?
If the profit was already factored into the price because everyone already knew what the profit was going to be before it was announced then that should be a neutral affect on the SP ??!!

Also they announced a buyback which I thought was usually a positive bit of news- so the SP should go up. If already factored in then there must have been some inside trading (duh!).

Please explain.
Click to expand...

in this sort of market, anything less than expectations would be punished.
EVERYBODY was expecting around $4.5billion or thereabouts so that was spot on.

Also, after RIO's announcement of share-buyback, the market was expecting something similar for bhp, anything less would have been punished by investors.

BHP price is dropping because of concerns that resource-boom is getting toppish and of the falling oil price.

Though in the long-term, BHP is a good buy imo...

uranium+oil = u cant really go wrong..
 
dutchie,
This decline is solely based on profit taking after the announcement. Analysts would have been upgrading their forecasts over the last 3-months and letting the insto's know. The insto's will then keep buying the stock on the upgrades pushing prices to what would amount to a fair value proposition by the analysts. Once it reaches f/v and the announcement comes in as expected, then there is no demand left in the stock. If there is no demand, it can only go one way - down. The results had to have been better than the analysts expectations to increase the f/v and increase demand. It come is as expected and as such, no further demand means any slight supply offered will have a large impact. That's what's happening now and its a self fulfilling prophecy until prices return to a reasonable "under valued" level. Yesterday's volume is clear cut selling.

bhp9dp.gif
 
Thanks for all your replies everyone.

I get the impression that when a company announces its profits (whether on the predictions or slightly better) the SP usually goes down.

I think I'm becoming a T.A. advocate. It is becoming more obvious to me that no matter what the news might be, for us lone traders, it is too late!
 
Nick I understand better with your explanation.

But why don't the insto's hold onto their shares if the SP is at a fair value (even if there are more sellers than buyers). FV should not change unless profits change (because of metal/oil price changes etc).

Insto's must be day traders?
 
dutchie said:
Ok all you fundamentalists

Anyone able to explain why SP is down after BHP's profit announcement?
If the profit was already factored into the price because everyone already knew what the profit was going to be before it was announced then that should be a neutral affect on the SP ??!!

Also they announced a buyback which I thought was usually a positive bit of news- so the SP should go up. If already factored in then there must have been some inside trading (duh!).

Please explain.
Click to expand...

Dude, base metals prices slumped overnight

Copper fell 8% etc

http://www.kitcometals.com/charts
 
Hi there - what are the implications of the share-buy back scheme that BHP announced? What exactly does this entail for share-owners?
 
Hi aobed

aobed said:
Hi there - what are the implications of the share-buy back scheme that BHP announced? What exactly does this entail for share-owners?
Click to expand...

The long term affect of the buy-back is that there will be less shares in circulation which increases the earnings per share and hence hopefully increases the share price further in the long term than it would otherwise without the buyback - given everything else being equal a company needs to continually raise its EPS if its share price is to continue rising in the long run.

In BHP's case you would need to do some careful number crunching to see whether it is worhwhile selling back any or all your shares, assuming you hold some.

BHP's payment for the bought back shares to the shareholder will have 2 components.

1) $2.10 is the capital component and so assuming you bought higher you can then claim the loss against other capital gains to reduce your annual nett capital gain.

2) the difference between $2.10 and the final buy back price will be paid as a fully franked dividend and so you will have franking credits to help reduce any annual tax payable, or they can increase any refund you would have received from the ATO.

But the trade off will be that BHP will be buying back the off-market shares at an 8% discount to the volume weighted average price (VWAP) over a period of 'X' days as per ann.

Basically, it's probably best to wait until they send out the buy-back doc's which should include all the details after which you can work out if you are better off selling back the shares at 8% discount but then getting the tax benefits in return, or whether to sell them on-market as per usual or just simply do nothing and hang on to them.

Hope this helps..

bullmarket :)
 
Hi traders

Just a basic point to remember when coming up to profit announcement times. Don't we all know if we are making a profit or not long before we head off to air it with our accountants?

What in the world makes you think most companies and those with dealings and an interest with them don't have a clue long before the 'official' profit announcement is made?

When you hear the media saying their usual stuff like the market didnt like it and so on, this is just their 'emotional' reporting. The greed run is made prior to the report. Then the stock is usually 'discounted' by the institutions in readiness for the dividend greed run. Why not do some back testing to see whether this is true or not?

Cheers
Happytrader
 
BHP up up and awwyyyyyyyyyyyy

BHP Investors who participated in the buyback and receive their payments should be buying back in large numbers in first or second week of April if they feel the BIG Australian has always looked after them and that there are not many places to place your hard earned nowadays.

This could be an Easter Present for the astute Trader. Am expecting $28 first week of April and later up to $31-00

Always follow your own instincts, common sense and personal analysis. :)
 
Re: BHP up up and awwyyyyyyyyyyyy

77TRADER77 said:
BHP Investors who participated in the buyback and receive their payments should be buying back in large numbers in first or second week of April if they feel the BIG Australian has always looked after them and that there are not many places to place your hard earned nowadays.

This could be an Easter Present for the astute Trader. Am expecting $28 first week of April and later up to $31-00

Always follow your own instincts, common sense and personal analysis. :)
Click to expand...

Sorry, a beginner q's.... What is the reason of Buy-Back?
 
Jesus christ 77TRADER77 you were pretty damn accurate with your predictions on this one!

Anyway, the reason I am posting is I am really really happy with BHP's performance the last 2 days. I've found the last few weeks have been all over the place (as is self-evident from the graph), which has actually benefited me as I've been getting in on the dips and selling on the rises (more or less).

But now that I have a solid position in BHP I am content now that I seem a resumtion (or confirmation) of the uptrend, which everyone e.g. Julia has been predicting will last for the rest of the year (forgive me if I am misquoting here)....
 
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