FMG - Fortescue Ltd

[tech/a]

For how long Duc?
Any targets
I’ve not had a good look at a chart
But will.
This has got a great deal of strength now built in
Taking out a lot of old sellers and powering on.
Supply just dried up. Demand continued until
It reached a level where it appears value has
Been found. Hence it’s come off a bit.

 

[ducati916]

For how long Duc?
Any targets
I’ve not had a good look at a chart
But will.
This has got a great deal of strength now built in
Taking out a lot of old sellers and powering on.
Supply just dried up. Demand continued until
It reached a level where it appears value has
Been found. Hence it’s come off a bit.

The [by far] strongest level was the $4.50 level. A weaker level [which didn't really participate in this breakout] were the $5.50 and $5.00 levels.

Therefore if I were actually trading this and were short, I'd be looking at $5.00 to cover. This assumes that there is actually some fundamental improvement in the stock and not just some headlines over a random event that was a positive for the stock.

If it were the latter, then I'd be more inclined to the $4.50 mark.

If it [the short] takes hold...it could be pretty fast, potentially lots of technical trades entered on the breakout...they will fold their cards pretty quick.

jog on
duc

 

[tech/a]

Im a little different and not so certain.
Now I am looking for a test of the high
and due to the late strength shown on Friday
a test of that low.

Before doing anything--was out very early so like you
out with the popcorn.

 

[ducati916]

Im a little different and not so certain.
Now I am looking for a test of the high
and due to the late strength shown on Friday
a test of that low.

Before doing anything--was out very early so like you
out with the popcorn.

Re. a retest of the high. If this were a trend that had been in place for some time, then absolutely, a retest of the high is a common occurrence as the trend ends.

With a very fast move, often, there is no retest, price just collapses. Also, on the intra-day data, the pattern is different. There have been large bar moves, then a consolidation, then a continued move higher.

The last large bar was significantly greater than previous bars and there has been an immediate decline, I suspect as early buyers now lock-in profits. This can have a cascade effect in the shorter timeframes.

I have no idea on the fundamentals of this stock, but if it is to trend higher over time, it will require the buying support of the fundies, they will not come in much before $4.50 assuming there actually is value here.

But ultimately...who knows....50/50

jog on
duc

 

[tech/a]

Your observations of the lower timeframes are classic
I only looked at the daily
I’ll open TWS and see what I find. Should have been
Using these earlier by the sound of it.

 

[ducati916]

Your observations of the lower timeframes are classic
I only looked at the daily
I’ll open TWS and see what I find. Should have been
Using these earlier by the sound of it.

I'll be interested in your observations and whether they match my own.

jog on
duc

 

[tech/a]

TWS is being worked on so can’t open
I’ll try tomorrow

 

[greggles]

FMG coming off its recent highs and looking for support.

 

[rnr]

FMG coming off its recent highs and looking for support.

There are least 4 unfilled gaps to choose from.
You almost have to believe that the chances of a bounce off support would be relative high.

 

[fiftyeight]

Vale disaster was here..ish.

Is FMG about to test how much of this run up is due to the disaster and short term trader action

OR

Long term buyers getting in before the price gets away from them as Vale may be in strife

OR

Vale disaster is over stated and the value investors who were buying pre breakout are getting squeezed by the traders because of Vale

OR

None of the above? I vote none of the above and who knows what is going down in IO town, but I hope Vale and FMG succeed together

 

[joeno]

What do we think about FMG? I've got quite a large portion of my FMG in my portfolio. Wondering if i should sell some...

 

[Value Collector]

What do we think about FMG? I've got quite a large portion of my FMG in my portfolio. Wondering if i should sell some...

For what it’s worth I am not selling, (except for a short term parcel I sold a call option on that is now in the money)

To be honest, I actually wouldn’t mind FMG heading back towards $5.50, it would give me a chance to sell some more puts, but either way it doesn’t really matter to me.

I think FMG’s future is very bright, these fluctuations don’t really register in my brain much except when deciding whether to sell puts or not.

 

[joeno]

For what it’s worth I am not selling, (except for a short term parcel I sold a call option on that is now in the money)

To be honest, I actually wouldn’t mind FMG heading back towards $5.50, it would give me a chance to sell some more puts, but either way it doesn’t really matter to me.

I think FMG’s future is very bright, these fluctuations don’t really register in my brain much except when deciding whether to sell puts or not.

Thanks for the vote of confidence. i'm no longer living in Australia but still have all my stocks there, so I'm a bit out of the loop. Is there reason to believe FMG is still undervalued? I'm not going to sell all my holdings - by no means. I'm very happy with the dividends in itself. But i'm thinking about reducing my holdings to invest in other stocks. Perhaps $10 is a good target for cashing in? But if there's still a lot more potential for the stock to rise... perhaps i'll stay put.

 

[Value Collector]

Thanks for the vote of confidence. i'm no longer living in Australia but still have all my stocks there, so I'm a bit out of the loop. Is there reason to believe FMG is still undervalued? I'm not going to sell all my holdings - by no means. I'm very happy with the dividends in itself. But i'm thinking about reducing my holdings to invest in other stocks. Perhaps $10 is a good target for cashing in? But if there's still a lot more potential for the stock to rise... perhaps i'll stay put.

If you remember back a year or two, I think me and you had a conversation where I said FMG was worth atleast $7.

Well, I believe it’s grown in value since then.

But also, I don’t generally sell a good company that is growing share holder value just because it reaches “fair value”, It would have to become quite over priced before I sold.

For example, take Coca Cola for instance, maybe it reached “fair value” in 1923, but it’s “fair value” grew at a steady rate for decades after that.

It can be risky to sell a good company at fair value, because you might end up locking yourself out, or end up buying back in at a price that may be lower on paper, but if worse after capital gains taxes and missed dividends etc are applied.

One thing I know is that I can’t time markets, but I can generally pick which are good Company’s to hold long term.

Any win I make timing the market is likely to be offset by off balance sheet opportunity losses I make by selling.

Some believe believe you should sell out if you double your money, if I did that on all my big wins that got me where I am, they wouldn’t have been the big wins, and I wouldn’t be where I am.

I pay attention to the ships heading, not the choppy seas.

 

[Skate]

If you remember back a year or two, I think me and you had a conversation where I said FMG was worth atleast $7.

Well, I believe it’s grown in value since then.

But also, I don’t generally sell a good company that is growing share holder value just because it reaches “fair value”, It would have to become quite over priced before I sold.

For example, take Coca Cola for instance, maybe it reached “fair value” in 1923, but it’s “fair value” grew at a steady rate for decades after that.

It can be risky to sell a good company at fair value, because you might end up locking yourself out, or end up buying back in at a price that may be lower on paper, but if worse after capital gains taxes and missed dividends etc are applied.

One thing I know is that I can’t time markets, but I can generally pick which are good Company’s to hold long term.

Any win I make timing the market is likely to be offset by off balance sheet opportunity losses I make by selling.

Some believe believe you should sell out if you double your money, if I did that on all my big wins that got me where I am, they wouldn’t have been the big wins, and I wouldn’t be where I am.

I pay attention to the ships heading, not the choppy seas.

What a great tag from @Value Collector..

"I pay attention to where the ship is heading, not the choppy seas"

Skate.

 

[Ann]

It appears the price hike in FMG and other iron ore stocks is related to the Vale dam disaster in Brazil. They have introduced large production cuts. I have been reading about Vale every day since the disaster and didn't connect the risk to the Iron Ore price, so need to improve my FA!
This has made the price of iron ore rise dramatically. I have been trying to find a chart for Iron Ore inventories but no luck so far. If the inventories are high the hike may be short lived, just don't know.
This is a current price chart for Iron Ore.

That was a post I made back on January 31st.

Now Vale is back in business....

Iron ore miners tumble after Vale allowed to restart Brazil mine

Australian iron ore miners have shed more than $7 billion in value on Wednesday after Brazilian courts allowed Vale to re-open an iron ore operation that was closed following a fatal mine dam disaster.

Vale's Brucutu iron ore mine will resume operations after it was closed when tailings dams burst in January, flooding the town of Brumadinho in Brazil's Minas Gerais state and killing hundreds. It means about 30 million tonnes of iron ore will come back onto the market. More...

It will be interesting to see what happens to the price now. The temptation is great to say Vale FMG!

 

[notting]

Jesus Christ. Just declared a special div of .60 going ex 22May That is HUGE!!!
They say you should not buy commodity stocks for div but this takes it to 10% fully franked for the Fyear. At it's current closing price of 8.09.
What an unbelievable year for holder types. Well done Value Collector. This thing is killing it and I don't think it's gonna stop here as it pays down debt and is just going to be a money printing machine.

Weekly chart going back to 2009 looks alright too -

 

[SuperGlue]

Forrest in $654m payday from surprise Fortescue dividend

"If the polls are correct and Labor wins power on Saturday, the deadline for excess franking credits to be paid as cash refunds to low-taxed investors could be June 30. The Fortescue dividend will be paid on June 14."

https://www.afr.com/business/mining...m-surprise-fortescue-dividend-20190514-p51n8d

Notice that a few companies are also paying dividends before June 30.

 

[Value Collector]

Jesus Christ. Just declared a special div of .60 going ex 22May That is HUGE!!!
They say you should not buy commodity stocks for div but this takes it to 10% fully franked for the Fyear. At it's current closing price of 8.09.
What an unbelievable year for holder types. Well done Value Collector. This thing is killing it and I don't think it's gonna stop here as it pays down debt and is just going to be a money printing machine.

Weekly chart going back to 2009 looks alright too -

View attachment 94627

That’s a 45% dividend for the year so far if you bought in at $2 when you and I were discussing it a few years back, it’s been a great run since then. Fully franked too.

 

[notting]

FMG Letter to share holders rushed out on Monday.
Re Shortens defeat -
Do you mind if we cancel the payout and keep the franking credits now!?