FMG - Fortescue Ltd

[over9k]

Hi over9k - I have never traded anything based on just Technicals - as a Technimental Trader my Stock Selection is based on 60% Financial Analysis and 40% Technical Analysis - If a stock does not meet my FA criteria then I do not bother with its TA - Once I locate a Financially Sound Stock, then I proceed to look at its TA.
FMG's IV is about $23.00, so proceeding to the TA stage is warranted.

Mm but what I was saying was that there's far more going on than the usual rules at the moment (See: ridiculous sums of money being printed, demographic cliffs being reached, massive debt chickens coming home to roost, trade wars...)

As I mentioned above, FMG as a company is bloody brilliant, but the actual mining business/iron ore market itself has me more than a little jittery and it would appear I'm not the only one.

I like talking to guys like you as the actual nuts & bolts (bean counting) of specific company financial analysis etc I find to be utterly mind numbing so we usually both know something that the other doesn't.


Anyways, point is, are you confident not of FMG itself but rather, the bigger iron ore/mining business picture? Because I'm, er, not.

 

[tech/a]

Agreed, but I'm not "Attempting to anticipate a bottom" - and I don't have the time to explain how indicators produce entry signals to you.

when you get a chance

 

[DrBourse]

over9k, I'm confident in Facts and FMG's Financials, BUT all sorts of Ramps, Rumours and Innuendos are irrelevant IMO.
FMG's TA atm is interesting, and could go either way.
Pullbacks & Spikes come and go, Facts & Financials, when properly verified/confirmed are what interest me more.
I joined into this FMG Forum with what most would consided a logical and well informed post, I also started 3 Froums within the Beginners Lounge, the initial reactions by some chatters does not really surprise me, guess I have to decide if my input here within ASF should continue, as I have better things to do rather than be a Target.
Disagree with me, definately, but try to do it politely, I'm not here to invade anybody turf, just thought a different approach to a stale old subject like FA & TA may have helped Newbies & Beginners, experienced traders will always be at odds with what I present, so I expect educated flack, I just object to the uneducated flack.
Lets see where we go from here on.

 

[basilio]

Mm but what I was saying was that there's far more going on than the usual rules at the moment (See: ridiculous sums of money being printed, demographic cliffs being reached, massive debt chickens coming home to roost, trade wars...)

As I mentioned above, FMG as a company is bloody brilliant, but the actual mining business/iron ore market itself has me more than a little jittery and it would appear I'm not the only one.

I like talking to guys like you as the actual nuts & bolts (bean counting) of specific company financial analysis etc I find to be utterly mind numbing so we usually both know something that the other doesn't.


Anyways, point is, are you confident not of FMG itself but rather, the bigger iron ore/mining business picture? Because I'm, er, not.

I can (just) see some points over9k in your concern about FMG/mining industry. But frankly I think they are overblown and miss some critical issues.

1) If we have any sort of industrial society there will be a substantial ongoing demand for steel and thus iron ore. FMG has a mature low cost iron ore business and at a micro level has developed excellent commercial relations with it's major Chinese industrial customers. One can believe that current iron ore prices will not hold but FMG is a soundly profitable company at prices down to levels that will cause many other suppliers to be unviable.

2) FMG is rapidly diversifying into a renewable energy company. Twiggy has made it clear by word, deed and big capital investment that FMG will be building massive renewable energy projects around the world. The initial investments will be incorporated into FMG's current iron ore business and make that even more competitive and thus profitable. The engineering skills they develop should make them a company of choice for a huge boom in renewable energy projects.

IF the world goes to hell in a hand basket then of course all bets are off. But frankly in that scenario I just don't see which major industries one could successfully invest in.

 

[over9k]

I can (just) see some points over9k in your concern about FMG/mining industry. But frankly I think they are overblown and miss some critical issues.

1) If we have any sort of industrial society there will be a substantial ongoing demand for steel and thus iron ore. FMG has a mature low cost iron ore business and at a micro level has developed excellent commercial relations with it's major Chinese industrial customers. One can believe that current iron ore prices will not hold but FMG is a soundly profitable company at prices down to levels that will cause many other suppliers to be unviable.

2) FMG is rapidly diversifying into a renewable energy company. Twiggy has made it clear by word, deed and big capital investment that FMG will be building massive renewable energy projects around the world. The initial investments will be incorporated into FMG's current iron ore business and make that even more competitive and thus profitable. The engineering skills they develop should make them a company of choice for a huge boom in renewable energy projects.

IF the world goes to hell in a hand basket then of course all bets are off. But frankly in that scenario I just don't see which major industries one could successfully invest in.

Points 2 & 3 are the relevant ones here.

Totally hearing you about the renewable energy stuff - with that in mind, one has to wonder why he's actually doing it? If the iron ore business was going to continue to be so good, why get into renewable energy? Why not just stick with rocks/dirt?

Does twiggy perhaps think, like I do, that the rocks/dirt business of the future is not going to be what it is now, hence the movement to green energy?


Reference hell in a hand basket - this is precisely what I'm anticipating. There are some very rough economic seas ahead for a lot of the world IMO, and china's not a ship I'd want to be on in said seas.

90% of my money is in U.S assets for a reason. NIO & DEG are basically my only other holdings and they're pure degen plays.

 

[bux2000]

Recommendation

Performance

06/09/2021ReduceFair Value $15.10 Liquidity HighReduceon 03/09/2021 Morningstar™ Premium Lowering Our Fair Value...

now obviously i am not operating on Morningstar advice , but just to show there is the odd pessimist out there

It is interesting that I had been accumulating more FMG in March 2020 at $10.60 when I read a recommendation by said "Morningstar Premium" being $8 and Simply Wall St similar, so I got cold feet and sold those I had accumulated in May 2020 at $11.81 ......... like you am not that convinced using Brokers recommendations alone is the answer, and Andrew Forrest is a unique individual.

Mining magnate Andrew Forrest upgrades to $98million private jet

Perth mining magnate Andrew 'Twiggy' Forrest celebrated Easter with the highly-anticipated arrival of his Bombardier Global Express 7500, which can fly around the world without stopping.

www.dailymail.co.uk

All the best
bux

 

[basilio]

Totally hearing you about the renewable energy stuff - with that in mind, one has to wonder why he's actually doing it? If the iron ore business was going to continue to be so good, why get into renewable energy? Why not just stick with rocks/dirt?

Does twiggy perhaps think, like I do, that the rocks/dirt business of the future is not going to be what it is now, hence the movement to green energy?

CLIMATE XXXXXXX CHANGE . Global warming. Cooking our earth to a crisp. Catastrophe.

There is no other way of putting it. Twiggy understands the reality of CC. He is acutely aware that we must move at warp speed to a no carbon renewable energy society if we are to have any chance of averting a total environmental catastrophe. This is a key basis for his determination to move very quickly to have FMG run on renewable energy.

On top of that he is also aware that the need for renewable energy around the world is practically limitless. So using the engineering skills, experience and billion dollar capital bank he has at hand he intends to make FMG a leader in this field.

With regard to the future of mining. Again he is no fool. He realises well enough that China is now determined to control it's iron ore sources as quickly as possible. He can see that 4-8 years ahead there is a strong chance China will have developed it's own mines in other countries. So now is the time to diversify.

And certainly the last point is critical. The consequences of CC pressures on our world are becoming apparent. There is a risk that this issue alone will result in breakdowns across the world. In that future I'm not sure what investments are going to be profitable. It may well be a secure house, a decent food and water supply, good friends and the kindest climate still around.

 

[basilio]

This presentation reflects Twiggy's view on CC and the direction he is taking FMG.

Twiggy Forrest’s green hydrogen ambitions will require renewables at 3x Australia’s total energy consumption​

In a campaign style speech, Andrew ‘Twiggy’ Forrest, founder of Fortescue Metals and one of Australia’s richest men, outlined his ambition of producing mammoth quantities of green hydrogen, a task he sees as imperative to stop the “planet cooking” while also cornering a market he believes will soon be worth trillions.

Twiggy Forrest’s green hydrogen ambitions will require renewables at 3x Australia’s total energy consumption

In a campaign style speech, Andrew ‘Twiggy’ Forrest, founder of Fortescue Metals and one of Australia’s richest men, outlined his ambition of producing mammoth quantities of green hydrogen, a task he sees as imperative to stop the “planet cooking” while also cornering a market he believes will...

www.pv-magazine-australia.com

 

[over9k]

This presentation reflects Twiggy's view on CC and the direction he is taking FMG.

Twiggy Forrest’s green hydrogen ambitions will require renewables at 3x Australia’s total energy consumption​

In a campaign style speech, Andrew ‘Twiggy’ Forrest, founder of Fortescue Metals and one of Australia’s richest men, outlined his ambition of producing mammoth quantities of green hydrogen, a task he sees as imperative to stop the “planet cooking” while also cornering a market he believes will soon be worth trillions.

Twiggy Forrest’s green hydrogen ambitions will require renewables at 3x Australia’s total energy consumption

In a campaign style speech, Andrew ‘Twiggy’ Forrest, founder of Fortescue Metals and one of Australia’s richest men, outlined his ambition of producing mammoth quantities of green hydrogen, a task he sees as imperative to stop the “planet cooking” while also cornering a market he believes will...

www.pv-magazine-australia.com

There you go.

 

[Austwide]

I see IO profits declining in the next few years (could easily be wrong).
If that happens I don't see where FMG will be able to fund the divs that shareholders are hoping for and develop large scale renewable energy sources and green steel if that proceeds.

Twigg may outside of FMG?

Do not hold currently

 

[divs4ever]

It is interesting that I had been accumulating more FMG in March 2020 at $10.60 when I read a recommendation by said "Morningstar Premium" being $8 and Simply Wall St similar, so I got cold feet and sold those I had accumulated in May 2020 at $11.81 ......... like you am not that convinced using Brokers recommendations alone is the answer, and Andrew Forrest is a unique individual.

Mining magnate Andrew Forrest upgrades to $98million private jet

Perth mining magnate Andrew 'Twiggy' Forrest celebrated Easter with the highly-anticipated arrival of his Bombardier Global Express 7500, which can fly around the world without stopping.

www.dailymail.co.uk

All the best
bux

i look at the brokers as a signal the share price MIGHT move in a direction i can take advantage of , i didn't look hard at FMG until $8 was gone , maybe i was jaded by over-promising CEOs elsewhere

regarding FMG i have confidence in the business ( currently ) i do NOT have confidence in the local currency ( which creates an extra minor tailwind for FMG )

now elsewhere here , i have stated my view that we are not in a real boom ( straight demand out-stripping supply ) what seems to be 'demand' is shortages created by bottlenecks and reflecting on the futures/spot market and the real boom is still a few years away ( assuming we don't slump into a global recession .)

and i agree Andrew Forrest is a rare ( but not unique ) CEO that stands out from the crowd , by delivering more often than he disappoints time will tell if his battery minerals play is the correct one , he might have taken a leaf out of MCR's book and explored to see if his current leases hold more than iron , first ( would be right handy if he had say gold or silver on his leases and some equipment and staff already on site ready to assess any deposits found

 

[basilio]

I see IO profits declining in the next few years (could easily be wrong).
If that happens I don't see where FMG will be able to fund the divs that shareholders are hoping for and develop large scale renewable energy sources and green steel if that proceeds.

Twigg may outside of FMG?

Do not hold currently

I don't believe anyone thinks the level iron ore profits of 20-21 will continue. Having said that all analysis indicates that if iron ore prices stay around the $80-100 ton mark then dividends of $2 per share a year would be obtainable.

FMG has allocated 10% of its net profits as seed money for the development of it's renewable energy projects. In the last two years that was worth at least $1Billion. It was always clear that there would be other off balance sheet investors.

Australia's Fortescue plans global green energy drive

Australian mining magnate Andrew Forrest outlined ambitious plans on Wednesday to build a renewable energy business, aiming to compete with oil giants to provide low-cost green energy globally.

www.reuters.com

 

[divs4ever]

There you go.

yep ,

and that is why i prefer boring minerals like silver , copper , iron , zinc ( maybe even uranium , if those damn governments would just get out of the way )

so far 'green' doesn't translate to energy efficient , it merely shifts the resultant pollution elsewhere

ALTHOUGH SXE ( i hold ) has be doing OK , on converting mine power generation to 'less harmful ' fuels

 

[basilio]

so far 'green' doesn't translate to energy efficient , it merely shifts the resultant pollution elsewhere ??

ALTHOUGH SXE ( i hold ) has be doing OK , on converting mine power generation to 'less harmful ' fuels

Not quite sure what your getting at here Div. There are a number of rationales for renewable energy

1) Renewable energy is now far more economical than fossil fuel sources. The ongoing energy source is free and the capital cost has now fallen below comparable fossil fuel generated power even when additional battery storage is taken into account

2) Electric vehicles are inherently more efficient than ICE cars. They don't waste a huge chunk of energy in surplus heat and braking losses. They are also simpler to produce and will last much longer than ICE cars.

3) The replacement of fossil fuel power plants with renewable energy plants takes millions of tons of pollutants out of the atmosphere. The reduction in green house gases is also critical in tacking climate change.

Points 1 and 2 alone would be powerful economic drivers for rapid replacement of fossil fuel generators with renewable alternatives.

Point 3 - the urgent need to tackle Climate Change, takes the urgency of the argument to whole new level.

Twiggy has twigged to the economic and environmental value of a vastly accelerated development of renewable energy . He has decided to take FMG in that direction and reap the rewards. The fact that he has a multi billion dollar enterprise that can seed finance and be first user of his new energy toys is icing on the cake as well as a whole new basket of goodies.!

 

[divs4ever]

the best argument for renewables is cost efficiency , however those driving the agenda are using the baseball bat approach , hitting you with new penalties until you change , regardless of resource efficiency , think of all the extra aluminum needed in partially useful solar panels , the extra rare earths needed for quality wind turbines

that tends to be counterproductive as willing explorers in renewables tech will create and tweak to a better mouse-trap INSTEAD they are buried with extra compliance and paperwork .

you will never have good innovation by a tax, tax. tax policy the most likely outcome will be more creative tax evasion

people are flying today because of two bicycle mechanics ( not a Ph. D in applied engineering , or a bureaucrat overseeing mass transport )

and then you could go to 'ignorant' Henry Ford as the dreamer who saw faster car production

and do you know what , solar panels have a limited lifespan , ( as do there electronics ) and wind turbines wear out ( and batteries so far don't last forever either ) so currently renewable , isn't always so environmentally friendly

the flaw in the policy is the top down approach

BTW who is going to recover all those solar panels floating around in space , or do we have to wait and see which ones hit us on the head

 

[Value Collector]

There you go.

Interestingly The Pilbara miners already produces more than 20 x the amount of IRON ORE as Australia consumes, No reason why some one couldn't scale up the energy business in a similar way, our energy market is tiny by global standards, but our potential renewable resources are huge.

 

[Value Collector]

solar panels have a limited lifespan , and wind turbines wear out

As do oil wells and gas turbines, and coal mines and coal fired power stations.

Yes, you have to invest materials to build renewables harvest wind and solar, But you have to invest pretty much the same types of material to harvest fossil fuels too.

 

[divs4ever]

CLIMATE XXXXXXX CHANGE . Global warming. Cooking our earth to a crisp. Catastrophe.

There is no other way of putting it. Twiggy understands the reality of CC. He is acutely aware that we must move at warp speed to a no carbon renewable energy society if we are to have any chance of averting a total environmental catastrophe. This is a key basis for his determination to move very quickly to have FMG run on renewable energy.

On top of that he is also aware that the need for renewable energy around the world is practically limitless. So using the engineering skills, experience and billion dollar capital bank he has at hand he intends to make FMG a leader in this field.

With regard to the future of mining. Again he is no fool. He realises well enough that China is now determined to control it's iron ore sources as quickly as possible. He can see that 4-8 years ahead there is a strong chance China will have developed it's own mines in other countries. So now is the time to diversify.

And certainly the last point is critical. The consequences of CC pressures on our world are becoming apparent. There is a risk that this issue alone will result in breakdowns across the world. In that future I'm not sure what investments are going to be profitable. It may well be a secure house, a decent food and water supply, good friends and the kindest climate still around.

yes you have under-explored Afghanistan , Mongolia probably have useful resources , and Russia and it's allies will soon be only a rail-link away , and probably willing to deal outside of the US Petrodollar , and then again China has developed a few trading partners in Africa , and Brazil MIGHT decide China is a viable trading partner

so yes moving away from China-dependency looks wise ( but might be unwise to burn that bridge completely )

 

[DrBourse]

Todays CCI is showing the 1st Buy signal, but will we get the other 4 signals over the next few days, or will it be FMG punters firing yet another Blank.
And will the MFI offer the required Confirmation signals??

View attachment 129943
View attachment 129944
The 5th Signal is missing - Correct, thats for you to work out.

FMG - Well "Shock & Horror" The CCI on FMG has given us an early morning 2nd Signal, AND the MFI has given a Very Weak Change of direction - Only 3 more Entry Signals to go before this may become a trade - HOWEVER, FMG could still go either way, that's why we need the remaining 3 CCI Signals and more +ive signal from the MFI.

 

[over9k]

Next resistance is at about the 16.50 mark.


I don't hold (any more).