FMG - Fortescue Ltd

Prospector said:

If you want to sell FMGDA before Jan 4 then you need to do this over the phone. FMG is one of my major parcels, and it shows up as $zero at the moment

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The Barbarian Investor said:

I'm on board the FMG train, but almost had two lumps in my throat when being away for a while I logged on and saw that FMG had dropped 90% (but then remembered they had planned a 10 for 1 split some time back).

My question is my Comsec Account Position Summary still shows as FMG (and is -100% with a value of $0)

Do I now OR am i able to change this to FMGDA or wait till Jan4th?

Whats the go?

What if I want to sell?

What if I want to set up a Trigger?

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Well mine has changed to FMGDA.

I do know however that ComSec Position Summary every weekend is not correct for some reason.

What has to be remembered here is that FMG is the consummate good news market play.

It is clear that FMG have a strategy of timing the release of potentially price sensitive market or media announcements to give fillips to the stock price, not least of which is the announcements of MOUs with Chinese steel producers at regular intervals to ramp up the price. This coupled with announcements of revised estimates of proven reserves at regular intervals is enough to provide basis support to the share price. Its a double whammy, as you only have to put the word "china" in a resource company's press and market releases and the market goes orgasmic. Perhaps a study of the number of times the reference to china in a FMG market or media release would be revealing in itself.

I am not sure whether Miner has undertaken a study of the share price history but it would not surprise me if the release of announcements (media or to the market) largely coincides with the jump in share prices. If so then this is a classic case of intended market manipulation through utilisation of the media channels.

It would not also surprise me if the PR department of FMG has the most staff on its payroll.

If this ever dawns on the mug share punter, it will be first out not last in who will be rubbing their hands together.

Since the last couple of correction days, FMG has dropped a fair bit 10%+ possibly due to panic selling or stop losses often seen in a bear market

going by history (if thats any indicator) you will find that there is a large retraction before a retrace to fresh highs..look at the chart

another thing to note is that the large couple of sellers that were present at 6.50 have now retracted their offers possibly due to the market having a green day today and noting that the worst is over (10% fall is classed as a correction)..

lastly, all major corrections be it 1987, 9/11, gulf war have seen the market come back stronger through a rally..

my anticipating the first shipment in march,

like to hear others thoughts.

Dont want to disappoint you but the first shipment is definitely not happening March.
Assuming the project is even on time, the Nov construction announcement on the ASX states that the Train Unloader will be commissioned in March
with the Shiploader,Stacker and Stockpiles being commissioned in April with first Ore on ship in May. Once again if on schedule so you will have to wait an extra 2 months (Min).

First shipment won't be til atleast june and thats if all goes to plan and no cyclones etc hold anything up.

enigmatic said:

Dont want to disappoint you but the first shipment is definitely not happening March.
Assuming the project is even on time, the Nov construction announcement on the ASX states that the Train Unloader will be commissioned in March
with the Shiploader,Stacker and Stockpiles being commissioned in April with first Ore on ship in May. Once again if on schedule so you will have to wait an extra 2 months (Min).

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Not certain, but I guess it would run something like this..Using stockpile bedding ore to commission the Train Unloader and the Stacker, Once that is done then shipping ore to build stockpile then commission Reclaimer and Shiploader with first shipping ore..??? Any comments??

its been hammered recently, but after the recent high of 8.47, and US up over 1% last night, very tempting buy in time. But it may well continue down, or be a bounce and go back again in a few days..

Anyone buying in on this slump? good work anyone who sold at >$8

Still falling on much higher daily average volume indicating lots of sellers still. id like to see selling volume drop off before i was a buyer.The momentum seems to be all down at the moment. even when the dow does rise still heads south!!

Nellyneil said:

First shipment won't be til atleast june and thats if all goes to plan and no cyclones etc hold anything up.

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people who are selling are either uneducated, misinformed, panicking or exercising stop losses

*DJ Fortescue Metals: Confident Of Meeting Project Start Date

(MORE TO FOLLOW) Dow Jones Newswires
January 10, 2008 19:28 ET (00:28 GMT)
*DJ Fortescue: Could Beat May Target For First Ore Shipment

(MORE TO FOLLOW) Dow Jones Newswires
January 10, 2008 19:28 ET (00:28 GMT)
*DJ Fortescue: Rail Construction Progressing Well

(MORE TO FOLLOW) Dow Jones Newswires
January 10, 2008 19:30 ET (00:30 GMT)
*DJ Fortescue Shares Recover, Latest Down 3.1% At A$6.00

(MORE TO FOLLOW) Dow Jones Newswires
January 10, 2008 19:31 ET (00:31 GMT)
DJ Fortescue Confident Of Meeting Project Start Date

MELBOURNE (Dow Jones)--Fortescue Metals Group Ltd. (FMG.AU) said Friday it remains on
track to meet its target of shipping the first ore from its iron ore project in Western
Australia in mid-May.
Fortescue Executive Director Graeme Rowley dismissed speculation the company is falling
behind its targeted start date.
"I am very very confident about May and in fact I am confident of beating it, but
by how much is really dependent on what happens with the weather in the next couple of
months," he told Dow Jones Newswires.
While mining and port construction has progressed well, work on the railways had fallen
behind schedule, but Rowley said rail construction is now progressing well.
"We are putting down rail at rate of just over two kilometers a day so I am really
very confident that the rail will be fine," he said.
Rowley said rail construction can be slowed by heavy rains, but the company has built
in some leeway for weather impact.
Labour in the Pilbara region of Western Australia remains tight, but Fortescue is
"suffering no worse than anyone else and better than most", Rowley said.
Mining has already started and Rowley said the surface miners that the company is using
continue to perform better than expected, working at rate of more than 1,000 metric tons
an hour and in some cases as high as 1,400 tons, compared to the original mine plan of
750 tons an hour.

-By Alex Wilson, Dow Jones Newswires; 61-3-9671-4313; alex.wilson@dowjones.com

(END) Dow Jones Newswires
January 10, 2008 19:49 ET (00:49 GMT)
Copyright (c) 2008 Dow Jones & Company, Inc.

Friday 11 January 2008 11:49:26:120 AEST

News Story: FMG - DJ Fortescue Confident Of Meeting Project Start Date

10+ FOS

Agro: Could you please clarify why FMG is cheaper at $5.90 (equivalent to $59 before split ) . Before the shares split this was strugling to go above $60 and at that time $45-50 was a reasonable value. This is how I interpret the share at current price.

Thanks

I still maintain my opinion that this stock is way overpriced.

There are plenty of other companies out there with solid business models and revenue streams operating at about PE 2 simply because they are unrecognised by the market.

FMG has not even recieved any cash and has only spent money so far. Theoretically this is still a spec stock, although with 'near term producer' status.

The only thing it has going for it imo, is it has been very well marketed.

agro said:

people who are selling are either uneducated, misinformed, panicking or exercising stop losses

10+ FOS

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ohhhhhhhw - I would never call anyone bailing after an excellent bull run any of those things

maybe they believe it will do what most stocks that move from the spec to production and then to the earnings phases do - drop way back until they prove the production and then show the actual earnings

Maybe they have ridden it most of the way up and need some cash and can't wait 8 years for a 4% divvy

prawn_86 said:

I still maintain my opinion that this stock is way overpriced.

There are plenty of other companies out there with solid business models and revenue streams operating at about PE 2 simply because they are unrecognised by the market.

FMG has not even recieved any cash and has only spent money so far. Theoretically this is still a spec stock, although with 'near term producer' status.

The only thing it has going for it imo, is it has been very well marketed.

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ok, i like to draw an analogy..

if a shop has a product in demand to sell, is it not true that they have to build the actual shop from the ground up before they can sell their product to the customers?

same deal with FMG, there was enough funding for the production of the port, rail network etc, (i doubt Packer would have backed a dud, this isno OneTel) and it is not a spec stock as JORC and 1b tonnes of iron ore has been identified.

If it was a spec stock, i doubt the top 10 steel companies in China along with Citigroup would be on board along with a 37% stake held by the man himself twiggy.

No, im saying that its status is probably still 'spec'. Officialy it is:

Business Description
Fortescue Metals Group Limited (FMG, formerly Allied Mining & Processing Limited) is a minerals exploration and development company with interests primarily in iron ore in Western Australia

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So it looks as though it hasnt been upgraded to "producer" status yet. Although this should happen when the first shipment is made.

I know it has plenty of JORC, but my main 'point' is the fact that there are heaps of other companis out there, in the resource sector, with JORC'd reserves and are producing, that are still on very low PE's due to lack of market recognition. Whereas FMG is virtually increasing just because of its name.

.......Curr 2008 2009 2010
EPS -2.6 -5.1 31.2 52.9

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So looking at this is it at a 2010 forward PE of 10 already. And a 2009 forward PE of approx 25.


My point is, there are current producers, on current PE's of just 2.

prawn_86 said:

I still maintain my opinion that this stock is way overpriced.

There are plenty of other companies out there with solid business models and revenue streams operating at about PE 2 simply because they are unrecognised by the market.

FMG has not even recieved any cash and has only spent money so far. Theoretically this is still a spec stock, although with 'near term producer' status.

The only thing it has going for it imo, is it has been very well marketed.

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Hey Prawn love to know some of these producers that u say are trading at PE of 2. And please don't come back with Centro and Rams.

Got in today at $5.82 on early morning intra-day resistance around 5.80. Surprised it took off the way it did near close.

Maliq said:

Hey Prawn love to know some of these producers that u say are trading at PE of 2. And please don't come back with Centro and Rams.

Got in today at $5.82 on early morning intra-day resistance around 5.80. Surprised it took off the way it did near close.

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They are out there Maliq. It just takes a bit of research. And no im not talking about RAMS etc, im talking about mining companies. But for the record there are a lot of others outside the mining industry also.

Perhaps you should run a search for my posts and see what comes up...

Maliq said:

Got in today at $5.82 on early morning intra-day resistance around 5.80. Surprised it took off the way it did near close.

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(potentially) great buy! seems it was the lowest point of the day! So ur already up 10%! That last couple hours is hardest for me to watch cause its 3-5am here lol. Im still scared to put any more money into the market yet though
Will see if US has another up tonight.

This company may well produce alot of iron and do very well in the future, but I got to agree with Prawn. I just cant be on with a company worth that many billion that hasnt shipped a thing.

Twiggy PR will be a share I will be looking to buy in the future.

wildmanchris said:

This company may well produce alot of iron and do very well in the future, but I got to agree with Prawn. I just cant be on with a company worth that many billion that hasnt shipped a thing.

Twiggy PR will be a share I will be looking to buy in the future.

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quote "hasnt shipped a thing" should read "is yet to ship a thing"

come March (if it beats initial expectations) or May (if it doesn't) when Fortescue makes their first iron ore shipment, and ramps up production each consecutive year would your opinion of the company change?

I do understand it is early stages in the process but BHP and RIO had to crawl before they walked..

It always enlightens me to read the views of skeptics.

agro said:

quote "hasnt shipped a thing" should read "is yet to ship a thing"

come March (if it beats initial expectations) or May (if it doesn't) when Fortescue makes their first iron ore shipment, and ramps up production each consecutive year would your opinion of the company change?

I do understand it is early stages in the process but BHP and RIO had to crawl before they walked..

It always enlightens me to read the views of skeptics.

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Again agro,

Its not that i think it wont make shipments, or increase production etc etc

It is the fact that the co is already valued at a forward 2009 PE of 25, which considering the average current PE throughout the entire market is about 16 and for miners about 20 (off the top of my head) it shows to me that it is overpriced, at the moment.

If they expand production way beyond intial plans, which isnt likely in a tight labour market etc, then the figures would change and i would need to re-evaluate.

Here is one scenario which i think has a fair chance of playing out, especially in current overall market conditions:
1. First shipment a month or 2 late (most mining projects are delayed at least a little)
2. SP stays around where it is currently mainly due to the DOW (another big drop last night)
3. Once production does happen SP spikes (typical amongst any firm which moves from explorer to producer)
4. Once financial/profit reports come out SP drops/levels to around $3 - $4 (which would be in line with PEs and consistent with people realising that production growth takes time)

Purely fiction at this stage, but its my take on things