FMG - Fortescue Ltd

[againsthegrain]

Just be wary of the current negative sentiment on Iron Ore

RIO went ex div on 12 Aug for a $7.60 div
Closed on 11 Aug (cum div) at $129.20
Closed on 12 Aug (ex div) at 120.26 and got down to $118.00 at one point today

because with fmg I am not in for a quick flip lately I am buying on negative sentiment, still pissed at myself for selling last year when the Twitter war was appareny the end of the world for fmg 19 or 20 I sold? then in a week or 2 was back at 25

The funds I have allocated are funds that are rotting in the bank at .25% interest so dividend in itself is worth changing the storage shed

 

[Beaches]

That $7.60 dividend is worth just under $11 including the franking credits, so that drop is pretty standard.

Except that it's already down from $135 and I'm not sure it has finished correcting.

I think the IO price will stabilise around the current levels. However the market seems more concerned that its heading south.

I'm only holding FMG as a trade, so currently undecided on whether to sell FMG before or after it goes exdiv. Probably another 2 weeks before a decision needs to be made.

 

[Beaches]

because with fmg I am not in for a quick flip lately I am buying on negative sentiment, still pissed at myself for selling last year when the Twitter war was appareny the end of the world for fmg 19 or 20 I sold? then in a week or 2 was back at 25

The funds I have allocated are funds that are rotting in the bank at .25% interest so dividend in itself is worth changing the storage shed

I agree, FMG looks good for the future, it's just a matter of how it is likely to play out in the short term.
If it looks like the price will hoid up after the div, I will exit after exdiv and then look for a new entry when the IO sentiment turns up. However, if it looks as though it might drop hard after the div, I will sell before and get a new entry at the discounted price

 

[Value Collector]

Except that it's already down from $135 and I'm not sure it has finished correcting.

View attachment 128994

I think the IO price will stabilise around the current levels. However the market seems more concerned that its heading south.

I'm only holding FMG as a trade, so currently undecided on whether to sell FMG before or after it goes exdiv. Probably another 2 weeks before a decision needs to be made.

with a $7.60 dividend, a drop of $11 on ex dividend date is the same the share price being flat any other day.

If it drops $12 it’s the same as if it only dropped $1.

that’s all I am saying, of course share prices fluctuate for other reasons besides dividends too.

 

[Ferret]

This correction for FMG is not showing any signs of bottoming yet. If it gets close to $20, I might look to add some.

 

[basilio]

This correction for FMG is not showing any signs of bottoming yet. If it gets close to $20, I might look to add some.

Getting in to score the current dividend looks attractive. Estimate are around $2.50 fully franked. Current SP is $21.87.

But don't wait too long. Twiggy is always in the wings sniffing for good value ( He bought 100,000 shares at market in late March after analyst inspired selloff)

 

[basilio]

Getting in to score the current dividend looks attractive. Estimate are around $2.50 fully franked. Current SP is $21.87.

But don't wait too long. Twiggy is always in the wings sniffing for good value ( He bought 100,000 (NO 10 million ) shares at market in late March after analyst inspired selloff)

Correction.. Twiggy spent $193m + buying 10 million shares in late March. Bit of a brain fade there.

He is certainly serious about the value of FMG. At 30th March held 1,131,365,000 shares.

 

[over9k]

It'd be worth taking a look at how closely FMG et al track the iron ore spot price. That's been absolutely pounded lately.

 

[Go Figure]

IF the IO price sat between US$90-120 (currently approx $159) and the US$ was around .73 an annual fully franked dividend of around $2.85 (including FC) is achievable. Iron Bridge production will bring with it a new revenue stream, further automation and reductions in running costs will serve to stabilise the CURRENT FMG business model and maybe some of the various governments mystical infrastructure spend may actually happen.

I’m looking forward to 30/8/2021 it’s decision time for the FMG board and PERHAPS an announcement or two of any new ventures and their impact on the group.

DYOR, best of health and luck to ALL during these awfully sad Covid days.

”IT’S ALWAYS DARKEST BEFORE THE DAWN”.

 

[basilio]

FMG now below $20. Almost certainly triggered some stop losses on the way. Looks like VG value (IMO). I will not be surprised, on earlier history, if Twiggy wades into the market as well.

On the other hand - there could be some big continuing fallouts from Afghanistan and out of control COVID...

And there is an imminent big dividend coming.

 

[over9k]

FMG now below $20. Almost certainly triggered some stop losses on the way. Looks like VG value (IMO). I will not be surprised, on earlier history, if Twiggy wades into the market as well.

On the other hand - there could be some big continuing fallouts from Afghanistan and out of control COVID...

And there is an imminent big dividend coming.

Is the divvy locked in or are they going to review it?

 

[basilio]

Is the divvy locked in or are they going to review it?

I can't imagine they would "review" it. It will reflect the income generated in the first 6 months of 2021. That has already been booked.

One possibility is that they may change their policy and pay a slightly different % of the net profit as dividend. Currently I understand they pay out up to 80% of the profit and allocate a further 10% to their future industries portfolio. The balance is retained.

FMG flags huge dividend as high-grade strategy struggles

Fortescue will pay another huge dividend as it pumps large sums into its clean energy subsidiary and struggles to make a switch to high grade iron ore.

www.afr.com

 

[divs4ever]

I can't imagine they would "review" it. It will reflect the income generated in the first 6 months of 2021. That has already been booked.

One possibility is that they may change their policy and pay a slightly different % of the net profit as dividend. Currently I understand they pay out up to 80% of the profit and allocate a further 10% to their future industries portfolio. The balance is retained.

FMG flags huge dividend as high-grade strategy struggles

Fortescue will pay another huge dividend as it pumps large sums into its clean energy subsidiary and struggles to make a switch to high grade iron ore.

www.afr.com

ok you have hooked me

i did a quick calculation of FMG v. WPL

and put an order in for FMG @ $20 ( which will probably be lowered tomorrow , if not taken today )

at $20 bucks a share FMG is the much better company

( IMO )

cheers

 

[basilio]

It will be interesting to see if FMG dips below $20 again in a hurry. I suspect the selling pressure today would have triggered a number of stop losses that accelerated the falls .

At under $20 with an imminent large dividend my guess is that everyone from Twiggy down would have wanted a piece of the action.

Current SP is $20.24 and gyrating.

 

[divs4ever]

am working on FMG being able to pay $1 twice a year in divs.

has room and the skills to grow

match that with WPL at roughly the same price or BHP at twice the price

and FNG is the obvious near term choice for me

( BTW i added more MGX this morning , so it is not just Twiggy worship )

the BIG question ... is there a major war on the horizon

 

[basilio]

One point to remember about FMG is there commitment to renewable energy development and using the synergies around clean hydrogen production and their iron ore sales. Put simply Twiggy is very interested in producing green steel using cheap solar generated hydrogen.

That process has already begun OS and will be a critical game changer in terms of addressing sustainability and carbon reduction worldwide.

‘Green steel’: Swedish company ships first batch made without using coal

Hybrit sends steel made with hydrogen production process to Volvo, which plans to use it in prototype vehicles and components

www.theguardian.com

FMG Chases Green Dream

Disruption is one of the cornerstones of the success of Andrew Forrest's Fortescue Metals Group.

www.energycouncil.com.au

 

[basilio]

am working on FMG being able to pay $1 twice a year in divs.

has room and the skills to grow

match that with WPL at roughly the same price or BHP at twice the price

and FNG is the obvious near term choice for me

( BTW i added more MGX this morning , so it is not just Twiggy worship )

the BIG question ... is there a major war on the horizon

Agree. I think the dividend estimate is on the mark.

Hopefully the Future industries projects will also prove effective and profitable.
Frankly I don't think anything could be as profitable as the last 12 months of iron ore sales. But a healthy return via renewable energy projects?. Yep IMV quite reasonable.

 

[over9k]

I can't imagine they would "review" it. It will reflect the income generated in the first 6 months of 2021. That has already been booked.

One possibility is that they may change their policy and pay a slightly different % of the net profit as dividend. Currently I understand they pay out up to 80% of the profit and allocate a further 10% to their future industries portfolio. The balance is retained.

FMG flags huge dividend as high-grade strategy struggles

Fortescue will pay another huge dividend as it pumps large sums into its clean energy subsidiary and struggles to make a switch to high grade iron ore.

www.afr.com

Probably because of this delta outbreak?

All bets were off with the first round of virus, there's no reason not to assume we might see the same thing with this new variant.

Everyone are bricking it for a reason.

 

[Value Collector]

am working on FMG being able to pay $1 twice a year in divs.

Based on that, that would would be $2.86 per year including Franking credits, So that would be a 10% return if you paid $28 or a 14% return based on todays closing price.

 

[Value Collector]

Probably because of this delta outbreak?

All bets were off with the first round of virus, there's no reason not to assume we might see the same thing with this new variant.

Everyone are bricking it for a reason.

The share market in general is higher now than it was before the delta out break, and we aren’t seeing a broad market crash, this is purely an Iron Ore price drop response.

I have said all along as soon as Iron Ore price drops there would be a big market over reaction, this is the over reaction.

If I had to guess, I think this is just a lot of speculators on the bull side panic selling combined with a bunch of short selling if both the shares of the producers and the actual Iron Ore.

I think it will play out in the following order.

1, Iron Ore price will stabilise once the speculators have sold their Ore.

2, The Ore price will recover a little as Mills realise that the Ore price has bottomed and they need to restock.

3, The FMG price will stabilise once the speculators have finished selling, and they realise the Ore price has stabilised.

4, The FMG share price will recover as shorters have to close positions.

Now I don’t claim to know at what point the Iron Ore Price will stabilise, I have said I think it’s fair price is some where in the $90’s, But it might not be ready to drop back to that yet, so it could stabilise well over $100, before returning to $90 some time next year, but every day over $100 is a great day for us holders.