FMG - Fortescue Ltd

[Value Collector]

@tech/a

Hi Tech,
Just wondering, I know that in the post I replied to above you were talking about how you thought it was crazy that some one might buy the shares at $23 and hold them as they dropped to $15, because as you pointed out they would be down $8 (even though that ignores the dividends)

But, did you take the opportunity to buy at $15, because you would have earned about 50% return per year for they last 2 years, doubling your money.

Or, did you sit on your hands and ignore the value in FMG ?

It seems weird to me that you want to beat up people for holding through a drop, but are you beating yourself up for missing the chance to get the bargain?

I mean even the guy that bought at $23 and held through the drop earned 18% per year, which is fantastic, but did you actually beat him?

Its hard to swallow, I would fire any finance guy that sat on his hands in the face of such beautiful bargains.

 

[tech/a]

VC
I note a large Bait being thrown out.

In answer.
I used FMG as an example and applied Radges 20/20 Trading methodology to it as an example and in comparing buy and hold to an alternative. There are always different methods around some better and some worse in any investment.
I'm not invested in FMG. I've only a small amount in the market currently. Other investments.

Didn't have the time on the weekend to work the 20/20 method on the last 2 years but just quickly.
Using say 100K and using the 20/20 method in the last 2 years

The low of 24/10 would have been bought at + 20% $ 16.71
Then the High of $22.83 would have been sold at 20% lower $18.26
The low of 14.76 would have been bought at 20% higher $17.71and
youd be still holding

You'd have 6288 shares valued at $161,920

You've held for a very long time and done exceptionally well.
We all do our best.

Don't know when dividends were paid so not included
My intention is not to ridicule just an alternate method.

My alternative was to buy a couple of freehold properties through Super 3.5 years ago.
Both have returned over 100% on capital invested and 23% a year on rent return on money invested.
Costs Negligable
Original investment $450K each. Rent averages $600 a week.

 

[Value Collector]

VC
I note a large Bait being thrown out.

In answer.
I used FMG as an example and applied Radges 20/20 Trading methodology to it as an example and in comparing buy and hold to an alternative. There are always different methods around some better and some worse in any investment.
I'm not invested in FMG. I've only a small amount in the market currently. Other investments.

Didn't have the time on the weekend to work the 20/20 method on the last 2 years but just quickly.
Using say 100K and using the 20/20 method in the last 2 years

The low of 24/10 would have been bought at + 20% $ 16.71
Then the High of $22.83 would have been sold at 20% lower $18.26
The low of 14.76 would have been bought at 20% higher $17.71and
youd be still holding

You'd have 6288 shares valued at $161,920

You've held for a very long time and done exceptionally well.
We all do our best.

Don't know when dividends were paid so not included
My intention is not to ridicule just an alternate method.

My alternative was to buy a couple of freehold properties through Super 3.5 years ago.
Both have returned over 100% on capital invested and 23% a year on rent return on money invested.
Costs Negligable
Original investment $450K each. Rent averages $600 a week.

Yeah, you used a trading theory on a historical chart, any one can do that.

But, I was just wondering if you actually used it to practice and took advantage of the situation to actually make money.

———————
Yeah I have held for a long time, since 2013 I think, some of the annual dividends have been higher than the price I paid for the stock.

It’s easy to buy and hold when you are banking huge dividends and are confident in long term capital gains.

I mean if you did buy at $15 you are getting like an 18% income stream, with no rates or insurance to pay. I own rental property too, but they don’t compare.

 

[Value Collector]

Fmg broke through their all time high this morning that they had back in August 2021, Since then they have also paid an additional $ 5.93 in dividends ($8.47 including franking).

It's interesting to note that at this point, No one that has bought and continuously held FMG up until now has lost money, even those that bought and held right at the peak in 2021 are green today, and have earned 16% per year in dividends. Only people that have traded in and out have lost money on this stock.

 

[farmerge]

Fmg broke through their all time high this morning that they had back in August 2021, Since then they have also paid an additional $ 5.93 in dividends ($8.47 in franking).

It's interesting to note that at this point, No one that has bought and held FMG has lost money, even those that bought and held right at the peak in 2021 are green today, and have earned 16% per year in dividends. Only people that have traded in and out have lost money on this stock.

Amazing that the three big miners are going gang busters at the moment.

 

[Dona Ferentes]

Amazing that the three big miners are going gang busters at the moment.

as go the miners, so goes the nation.
.
Recently issued MYEFO data demonstrate how federal tax revenue – currently running about $20 billion a year across the big three – is improving the nation’s fiscal position.

For the Albanese government, it shouldn’t be missed that estimates of company receipts in just this financial year have increased by $9.2 billion, or 7.1 per cent, between May’s budget and Wednesday’s MYEFO, thanks largely to a strong iron ore price.

And over the next four financial years, the estimate of total tax receipts have been revised up by $57.2 billion since the budget in May which, again, is “primarily reflecting near-term strength in commodity prices”.
.
mind you, Treasury had US$60 a tonne pencilled in, and is holding to thst number for 2024. Today, the most common pricing is US$137 a tonne.

 

[Captain_Chaza]

Well Done!
BUT
No Capital Gains in >2 years ??
Was that your Plan?
I am happy it works for you

Sailing the FMG---------- One Week at a Time

 

[Value Collector]

Well Done!
BUT
No Capital Gains in >2 years ??
Was that your Plan?
I am happy it works for you

Sailing the FMG---------- One Week at a Time
View attachment 167156

View attachment 167157

I bought most of my FMG back between $1.80 and $5.00, and I live off the dividends, so have had plenty of capital gains.

But yes, long term hold collecting dividends waiting for the inevitable capital gains was my plan, and still it my plan, I won’t be selling a single share.

But, as I said even people that bought at the peak in 2021, still made a solid return since then just in dividends.

All long term holders are way green on this now.

 

[Value Hunter]

Value Collector we all know that the FMG iron ore business is a good business. Also despite what bears think I think Iron prices will remain solid the next two years. The real question with Fortescue is what happens with Fortescues green energy ambitions and if that ends up being a major drag on company profits and return on equity. Value Collector I would like to hear your view on what impact the company's green energy ambitions will have on its results going forward?

 

[Value Collector]

Value Collector we all know that the FMG iron ore business is a good business. Also despite what bears think I think Iron prices will remain solid the next two years. The real question with Fortescue is what happens with Fortescues green energy ambitions and if that ends up being a major drag on company profits and return on equity. Value Collector I would like to hear your view on what impact the company's green energy ambitions will have on its results going forward?

To be honest I look at it this way.

1, The current share price doesn’t even represent the fair value of the Iron Ore business and the earnings streams it generates. So if one invests today, you are only really paying for the Iron Ore business at a discounted rate, and getting the green energy business potential for free.

2. The investments FMG are making into “Greening” their own operations, eg electric trucks, solar electricity production etc etc are very low risk and will offset a chunk of the huge diesel costs FMG has.

3. The big energy hub type investments are higher risks, but they plan on splitting the investment with external investors, and as I said we get that part of the business free, but it has the potential to be a huge business 10 years from now, maybe equal to the Iron Ore business.

————————————
If FMG can average say $1.50 in dividends each year, it’s easily worth $30 on that basis alone.

If in the process it’s only paying out 70% of earnings and investing the other 30% in new mines and some potentially huge energy businesses, those retained earnings could prove to grow the share price and earnings way passed $30.

I have done many different calculations on what FMG could potentially be worth in the future and I am almost embarrassed to mention some of my valuations.

Let’s just say $28 is easy, $35 is probable and way more than that is possible.

 

[Value Hunter]

To be honest I look at it this way.

1, The current share price doesn’t even represent the fair value of the Iron Ore business and the earnings streams it generates. So if one invests today, you are only really paying for the Iron Ore business at a discounted rate, and getting the green energy business potential for free.

2. The investments FMG are making into “Greening” their own operations, eg electric trucks, solar electricity production etc etc are very low risk and will offset a chunk of the huge diesel costs FMG has.

3. The big energy hub type investments are higher risks, but they plan on splitting the investment with external investors, and as I said we get that part of the business free, but it has the potential to be a huge business 10 years from now, maybe equal to the Iron Ore business.

————————————
If FMG can average say $1.50 in dividends each year, it’s easily worth $30 on that basis alone.

If in the process it’s only paying out 70% of earnings and investing the other 30% in new mines and some potentially huge energy businesses, those retained earnings could prove to grow the share price and earnings way passed $30.

I have done many different calculations on what FMG could potentially be worth in the future and I am almost embarrassed to mention some of my valuations.

Let’s just say $28 is easy, $35 is probable and way more than that is possible.

I also think its a company that is somewhat hard to value because the Iron Ore price can effect earnings by a huge amount. I think if you are of the view that you are and I am also that the Iron Ore price will remain reasonably robust its undervalued. However for the bears that think Iron Ore prices could drop 30 - 50% in a few years its not looking like a great investment.

 

[Value Collector]

I also think its a company that is somewhat hard to value because the Iron Ore price can effect earnings by a huge amount. I think if you are of the view that you are and I am also that the Iron Ore price will remain reasonably robust its undervalued. However for the bears that think Iron Ore prices could drop 30 - 50% in a few years its not looking like a great investment.

I base my valuation on an Average Iron Ore price that is much lower than the current Iron price, and as I said it’s an Average so dropping below that for a time doesn’t really matter.

But, yeah God bless those bears they have been buying the FMG out options I sell for years .

We all have to make estimates when we value companies, those with the best estimates (and the guts to back them) will make money.

 

[Garpal Gumnut]

I have done many different calculations on what FMG could potentially be worth in the future and I am almost embarrassed to mention some of my valuations.

Let’s just say $28 is easy, $35 is probable and way more than that is possible.

I must admit that I only held FMG for trading between $16 and $21 over the last few years. After Twiggy announced the sequestration of the Hydrogen brainfart from unlimited calls for funds from FMG it made my decision easier to jump on for the long haul in my long term SMSF.

I'd gladly live with the sp at $28 for a while considering the divies. $35 which is now attainable would make me want to go bowling with Lebowski. The Hydrogen was the only big risk that I saw. Now that is done and dusted the iron ore price doesn't worry me. Then that's just my opinion.

gg

 

[Mr Flibble]

Simandou is a worry down the track though....

I bought in Sept 2020 @ 16.20, came very close to selling in july '21, but thought nah, I'll hold on for another couple of months so I get the 50% discount. I'm considering selling again now, but can't think of anything better to replace it with.

 

[Value Collector]

I saw a ship in the port of Brisbane today with 2 big LNG fuel tanks, I wonder if ships in the future will have similar tanks filled with FMG’s hydrogen or ammonia.

Meanwhile FMG breached $28 for the first time today

 

[over9k]

If you're pricing FMG as a value play the divvy yield is a tad over 6% vs just dumping the cash in a savings account for about 5%. With risk premium that low (basically non-existent) pricing it as a value play is wrong in and of itself.

Value plays are by definition plays which carry a risk premium for their dividends. If there's no risk premium then it becomes a growth bet, so your very approach is wrong here.

If you were to ask me whether I think FMG is a decent growth play, well, that's a different question.

 

[basilio]

Couple of relevant news items in the FMG Media stream.
Share Price predictions. I wonder what the plethora of advisors who rated FMG at between $13 and $18 only a couple of months ago are saying now ?

1) FMG was awarded a 200m Euro grant to develop a green ammonia plant in Norway.
2) They have deployed Australia's first operational electric excavator. Massive machine. Would use tons of juice
3) They showcased a duel fuel green ammonia powered ship in COP 28. Fair bit of effective R@D in the unit which is intended to be used on the FMG ore carriers in due course

News

fortescue.com

Fortescue awarded €200million in European Union funding for Norway green ammonia project

The European Union is significantly investing in Fortescue’s plans for a flagship green ammonia plant in Norway, awarding the Holmaneset Project an Innovation Fund grant of €203,766,000.

fortescue.com

Fortescue deploys Australia’s first operational electric excavator

Australia’s first newly built electric excavator is now operational at Fortescue’s Cloudbreak mine site.

fortescue.com

Fortescue’s Green Pioneer arrives in Dubai for COP28

The Fortescue Green Pioneer has sailed from its base in Singapore to Dubai for COP28 as a symbol to the world of the technology solutions and regulatory changes needed to decarbonise shipping.

fortescue.com

 

[basilio]

Fortescue Metals Group Ltd (FMG) Share Forecast, Price Targets and Analysts Predictions - TipRanks.com

Fortescue Metals Group Ltd Share forecast & analyst price target predictions based on 9 analysts offering 12-months price targets for FMG in the last 3 months.

www.tipranks.com

 

[Captain_Chaza]

What's the Problem?

Sailing the Great FMG Heavyweight -----One WEEK at a TIme-------------&----------------One DAY at a Time

 

[systematic]

Well, if you did buy Fmg 2 years ago at $23 and "Sat on your hands" you would have earned a 12% per year in dividend and be sitting on another 12% capital gain, making it about an 18% return per year, Some times it pays (a lot) to sit on your hands.

to be honest I'd fire any financial guy that showed signs of hyperactivity, but I guess we are different people.

I totally missed this. Been out of it for a bit. Quote of the decade minimum, for me.