BHP - BHP Group

[Goldmann]

BHP would ahve to be the single biggest stock that people now have Margin calls at risk with... for every day it crashes 5% - expect it to crash another 5% the following day as people get their margin calls... viscious cycle this is we are in...

Long term - it may well be a great entry price anywhere around $25... but at this stage, and after call two false bottoms - most people will avoid the market like the plague now... nothing is to be trusted, history is now being written...

one more decent 1987 like 20% fall to go IMO... keep your pennies close...

 

[prana]

I just need team Ju and Dh to tell me this business is dead, "a friend of a friend who predicted the death of Enron said this is a goner", then the sentiment will be just right to make a move on this one.

This is one of the worlds great businesses, with high exposure to oil, Uranium and coal, I'll be happy to invest back in at the helm of asset deflation.

 

[Boggo]

This was last nights data, its hit the first target today and $22 is not far now.

Another lovely short gone begging

Unbelievable really !

(click to enlarge)

 

[Mr_T]

FWIW, I know quite a few people in China and Australians who have visited China lately. They all say the same thing. China is BOOMING. Zero evidence of economic slow down.

 

[sardines]

Why not let the top-down sellers have their fun for a while? There's plenty of this "global recession means everyone and the US will fall" wisdom being freely dished out on the likes of Bloomberg and such. These investment themes usually last at least about 3 or so weeks so I'd prefer to be meeting the sellers much further down the price list.
P.S. ASIC's due to review the reinstatement of shorting so I'm dusting off my stocks and getting my $ ready.

 

[Ashsaege]

BHP would ahve to be the single biggest stock that people now have Margin calls at risk with... for every day it crashes 5% - expect it to crash another 5% the following day as people get their margin calls... viscious cycle this is we are in...

Long term - it may well be a great entry price anywhere around $25... but at this stage, and after call two false bottoms - most people will avoid the market like the plague now... nothing is to be trusted, history is now being written...

one more decent 1987 like 20% fall to go IMO... keep your pennies close...

I doubt that many people would still have margin loans in these times... surely they have been flushed out by now.

 

[DionM]

I doubt that many people would still have margin loans in these times... surely they have been flushed out by now.

I have it on good advice (from a friend that works there) that Commsec made plenty of phone calls last weekend ... plenty of margin loans still around - but maybe now people have run out of capital to put in and and selling.

Anyway, back to BHP ... I'm very tempted to add some more to my collection. The next drop might convince me.

 

[treefrog]

I have it on good advice (from a friend that works there) that Commsec made plenty of phone calls last weekend ... plenty of margin loans still around - but maybe now people have run out of capital to put in and and selling.

Anyway, back to BHP ... I'm very tempted to add some more to my collection. The next drop might convince me.

not so sure BHP near their bottom yet DM - when BHP has tanked before there seems to have been a least a few of their activities hold prices well - like eg oil down, iron up, U up etc.
Hard to think what they are into these days that has not tanked in price or is at risk of reduced demand in near future

 

[Garpal Gumnut]

BHP is a beautiful stock to chart, all human life is there. Asutralian's hopes and dreams, their super and future often rest on this little miner.

I have been following BHP for many years.

I enclose a weekly chart from mid 1998 to the present.

Firstly it is important to note that BHP remains in a primary uptrend and should it continue, confirmation will occur when it goes through its previous all time high of $47.70.

However when I stood at the other end of the verandah from the screen I noticed a pattern which should urge some caution.

BHP may be in a head and shoulders pattern in a larger as well as a more recent time frame.

The gold trendline shows longer term longer time support and the blue the shorter term support. The trading range which I expect BHP to trade in should it fall is $23 to $30. I'll certainly be topping up below $30 and definitely at $23 should this "correction" continue. The shoulders are shown as big and little, in the respective time frames. The possible heads are the same, the recent highs.

I would be wary therefore of a rally to $40 especially on low volume as it may auger a retracement and fulfillment of the head and shoulders hypothesis.

So I'll be buying if it continues down and watching volume if it recovers.

gg

This is a very old comment of mine which rings true. I'm in like flynn at present. One or three dollar difference in buy in price will seem like chickenfeed in 3-5 years time. I enclose a chart.

gg

 

[Mr_T]

Without anyone talking about it, BHP has become a high yielding share (dividend wise).

Keep in mind that the dividend is paid in us dollars. Which means that the sharp fall of the aussie dollar mean something like a 40% increase in its dividend in the future (assuming dollar stays around where it is).

So although Comsec says BHP has a 3.8% div yield, if it was paid at current exchange rates it would be much higher. The interim div paid early next year is also expected to be much higher in as far as BHP lifting the payment - a different issue.

If interest rates will go down to 7.2% (realistically expected in next few months) it could quickly become cashflow positive when including franking credits (if funded by a home equity loan).

 

[Sean K]

Without anyone talking about it, BHP has become a high yielding share (dividend wise).

Keep in mind that the dividend is paid in us dollars. Which means that the sharp fall of the aussie dollar mean something like a 40% increase in its dividend in the future (assuming dollar stays around where it is).

So although Comsec says BHP has a 3.8% div yield, if it was paid at current exchange rates it would be much higher. The interim div paid early next year is also expected to be much higher in as far as BHP lifting the payment - a different issue.

If interest rates will go down to 7.2% (realistically expected in next few months) it could quickly become cashflow positive when including franking credits (if funded by a home equity loan).

You're assuming dividends will remain at current levels.

Interest rates will probably go much lower than 7.2% though..

 

[Mr_T]

You're assuming dividends will remain at current levels.

Interest rates will probably go much lower than 7.2% though..

Agree with interest rates.

You think BHP is going to lower their div payments? Their payout ratio has always been low, and their profit is conservatively (in Australian dollars) to go up 80%+ this year.

I guess a very very huge decrease in commodity prices could lead to lower dividend payments, but it's not likely.

 

[jonojpsg]

not so sure BHP near their bottom yet DM - when BHP has tanked before there seems to have been a least a few of their activities hold prices well - like eg oil down, iron up, U up etc.
Hard to think what they are into these days that has not tanked in price or is at risk of reduced demand in near future

Gotta remember tho that BHPs coal and iron ore prices are locked in for the next year at much higher price than last year, that the $A fall has meant that oil is still over A$100 a barrel. And there is no doubt that even with reduced oil demand, the overall supply/demand situation is not going to improve much from here on in since peak oil has hit. Base metal prices are definitely the kiler atm tho, but I think BHP should weather the storm and not head more than another couple $ further.

 

[DionM]

At around US0.70 roughly per year in divvies, that's say 1 AUD per share.

At $25 AUD / share ... that's 4%.

 

[Mr_T]

At around US0.70 roughly per year in divvies, that's say 1 AUD per share.

At $25 AUD / share ... that's 4%.

That's 4% franked.

Say you're on the 30% tax rate (as most people are).

7% interest = 4.9% after tax

Get 4%, pay no tax if on 30% rate as fully franked.

That's not quite cashflow positive, but nearly there.

Of course, a slight increase in dividend payments will then push it into positive territory, but that is speculation.

 

[PFWA85]

not so sure BHP near their bottom yet DM - when BHP has tanked before there seems to have been a least a few of their activities hold prices well - like eg oil down, iron up, U up etc.
Hard to think what they are into these days that has not tanked in price or is at risk of reduced demand in near future

agreed, i think we could see another spike before it goes lower though i think.
i added a small proportion to my portfolio this morning, may not be at the bottom yet but i see it as a long term prospect still.

 

[gfresh]

BHP talked about raising the dividend a while ago, and I think now/soon would be an excellent time to do so.

As less cash required for project expansion (due to reduced demand), it would seem sensible that instead of spending that money, there would be the environment to pass some of that excess cash to shareholders.

This would also help stabilise the share price, and help encourage longer-term investors and/or institutionals looking for good-yield stocks in a low-growth environment.

Depends on the fate of the RIO deal I guess. If cash is required to fund that, then things will be different.

The good thing with BHP is that they been through all this before, lower demand, lower prices, etc, they know the likely impacts, and how to adapt. They have people at the top who have been around well before 2003, who will know what needs to be done. They are much better positioned IMO than many of the miners who have rose to such prominence only in the last 10 years, and who have been only been exposed to the "good times"

 

[gfresh]

Here is a quick chart of major support levels as I see them.

$24.00 (very close to current price), if that falls $20.. then $16 seem to be the next major support levels. Not so sure on $16, but $20 would seem possible in the near-term.

p.s. maybe should use a LOG scale, but anyhow, here it is..

 

[noirua]

If and when? BHP decide to drop their bid for RIO, could see a concerted buy-back of stock. A sharp increase in dividend might well give a lift in the short term but once that's out of the way people will focus on likely further increases after that, not much.

 

[nick2fish]

If and when? BHP decide to drop their bid for RIO, could see a concerted buy-back of stock. A sharp increase in dividend might well give a lift in the short term but once that's out of the way people will focus on likely further increases after that, not much.

No if.... but a when ? BHP can smell the fear in its prey now and will be closing in for the kill. Recent developments have me seeing a deal that is almost done and dusted. IMO