FMG - Fortescue Ltd

[skc]

FMG seems to be hovering around 5.60. Weakness not helped by the high prospect that diesel rebates for miners will be going in the budget.

Probably more to do with what Jim Chanos said.

US Hedge fund manager and short seller Jim Chanos has singled out Fortescue Metals as an example of a ''value trap'' in the ''iron ore rush", according to a report by Fairfax Media.

http://www.businessspectator.com.au...ument&src=idp&emcontent_asx_financial-markets

Chanos was well known for his call on Enron.

 

[Tysonboss1]

I can see a big opportunity for gain at the current price,

Even factoring Higher production costs and a much lower iron price (say $100), Fmg could still easily maintain a profit margin of $20 a tonne.

This means that by june next year they will be earning at least $0.99 per share, and thats only if there is a sustained fall in the iron ore price.

Their current margin is over $50 per tonne, so they are cashflowing quite strongly, which is paying for a decent chunk of the expansion projects.

If they are able to maintain a margin of around $50 a tonne, by june next year they will be earning, $2.47 pershare,

Either way this looks like a great opportunity to me,

 

[Garpal Gumnut]

I can see a big opportunity for gain at the current price,

Even factoring Higher production costs and a much lower iron price (say $100), Fmg could still easily maintain a profit margin of $20 a tonne.

This means that by june next year they will be earning at least $0.99 per share, and thats only if there is a sustained fall in the iron ore price.

Their current margin is over $50 per tonne, so they are cashflowing quite strongly, which is paying for a decent chunk of the expansion projects.

If they are able to maintain a margin of around $50 a tonne, by june next year they will be earning, $2.47 pershare,

Either way this looks like a great opportunity to me,

I would agree from the charting view.

FMG has fallen from nearly $6.20 to the $4.20's in just over one month.

The pivot point low over this last 3 trading sessions has me in again, with a stop loss at $4.23.

gg

 

[Garpal Gumnut]

I got out today with a 5.8% profit, net.

I take smaller profits in this volatile environment.

gg

 

[Garpal Gumnut]

I got out today with a 5.8% profit, net.

I take smaller profits in this volatile environment.

gg

For the brave, if volume increases over the next few sessions with a move up a nice profit of 5-10% may be achievable with a target of $5.15 to $5.30 before FMG hits bigtime resistance between $5.30 and $6.00.

Poisonally I will sit on my hands at this point in time.

gg

 

[Garpal Gumnut]

FMG has made 2.5% at this moment since my above post. I do regret not taking my own advice.

gg

 

[Tysonboss1]

FMG has made 2.5% at this moment since my above post. I do regret not taking my own advice.

gg

Mr Forrest has announced he has used this recent down turn to buy about $60M FMG shares at $4.90.

I am looking forward to the full year results, They should be quite good and put FMG to about 8 times earnings.

A long position at current levels seems very rational to me, I am looking to extent my position in fortescue, I have sold some puts recently.

 

[beatthemarket]

Entering seasonal steel strength from September. Quarterly, FY result likely positive surprise..

 

[seanious]

So I got in at 4.40 early this month, down to 3.90 on last close

What do you guys think of this stock now? Looks like everyone is freaking out because of their high debt and lower iron ore prices.

 

[skc]

So I got in at 4.40 early this month, down to 3.90 on last close

What do you guys think of this stock now? Looks like everyone is freaking out because of their high debt and lower iron ore prices.

Is everyone freaking out because of their high debt and lower iron ore prices, or is everyone adjusting their investment because of their high debt and lower iron ore prices?

 

[seanious]

Is everyone freaking out because of their high debt and lower iron ore prices, or is everyone adjusting their investment because of their high debt and lower iron ore prices?

Sounds like a question for someone more educated on this then me....

 

[ROE]

Creditor of Iron Ore Miners are freaking out due to falling iron ore price mentioned in AFR
credit default swap on FMG, RIO etc.. debt jump but FMG in particular...

 

[nulla nulla]

So I got in at 4.40 early this month, down to 3.90 on last close

What do you guys think of this stock now? Looks like everyone is freaking out because of their high debt and lower iron ore prices.

Is everyone freaking out because of their high debt and lower iron ore prices, or is everyone adjusting their investment because of their high debt and lower iron ore prices?

Isn't FMG being shorted by a big U.S hegde fund?

 

[ROE]

Isn't FMG being shorted by a big U.S hegde fund?

they are spot on on this.. all FMG modeling involve Iron Ore around $110 a Tone
what is Iron Ore price today? 95-99? going back to GFC price FMG no more

This guy is way over leverage and the CEO for some reason or another refuse to beleive
Iron Ore can not revisit GFC price .. Hubris + Large Debt ~= Game Over

so I can see why people are exiting ...

 

[doctorj]

they are spot on on this.. all FMG modeling involve Iron Ore around $110 a Tone
what is Iron Ore price today? 95-99? going back to GFC price FMG no more

Sub 95 now... with Macquarie and Morgan Stanley predicting further falls up to another 16%.

 

[ROE]

Iron ore future crash over night to $80 ish level here we go interesting day for fmg

 

[prawn_86]

Iron ore future crash over night to $80 ish level here we go interesting day for fmg

Andrew Forest bought $18.5m worth of shares on market yesterday apparently so putting his money where his mouth is and trying to support the FMG share price by the looks

 

[seanious]

Thanks for the information, if anything this is going to be an interesting learning experience for me, will follow it closely

 

[Huskar]

Iron ore future crash over night to $80 ish level here we go interesting day for fmg

Out of interest where do you source your current iron ore and other base commodity prices from ROE? Is there free and up-to-date source? Most seem to want to charge you an arm and a leg..

 

[skc]

Plenty of notes floating around today on how FMG is barely breaking even at current Iron Ore spot price... it could have easily capitulate today. May be Twiggy was buying again.

Interesting times.