FMG - Fortescue Ltd

[happytown]

Can still remember his early foray into importing Lama's where eventually the investors as well as the Lama's were spitting.

glad to have missed the brief llama bubble

Regardless, it is onwards and upwards

great ride particularly lately

incidentally abc midday news (for what its worth) spoke briefly as to the trading halt and alluded to the inability to complete regular assessment update due to cyclone damage and expect the halt to run its full length, ie till tuesday (with no mention of either west aust or smh thoughts)

i tend to agree with your comments re shipping deadline

cheers

 

[Kauri]

From todays West Australian... they seem to have covered all the bases...

Iron ore hopeful Fortescue Metals Group has gone into a trading halt amid speculation it may be the subject of a takeover bid.






Fortescue further fuelled rumours of an imminent deal yesterday by calling a trading halt ahead of an announcement on Monday.

The halt comes after it confirmed on Thursday that negotiations with unnamed parties could lead to a material agreement if concluded.

Though Fortescue is expected to sign another incremental off take deal with Chinese buyers next week, analysts yesterday said that alone was unlikely to warrant a trading halt.

But Daiwa Securities analyst Mark Pervan said Fortescue might be negotiating new contracts sufficient for an accelerated expansion program.

Industry sources have also suggested Russian and Chinese steel interests may be again eyeing a strategic interest in the company after missing out on a cornerstone stake last year.

It was also suggested that Fortescue might be negotiating a new equity injection to counter delays and cost blow-outs at its $3.7 billion Pilbara iron ore project in the wake of cyclone George.

 

[2020hindsight]

fuelled rumours of an imminent deal yesterday by calling a trading halt ahead of an announcement on Monday.

......It was also suggested that Fortescue might be negotiating a new equity injection to counter delays and cost blow-outs at its $3.7 billion Pilbara iron ore project in the wake of cyclone George.

New Equity injection - would that usually mean drop in share price? (with options to compensate?). Of course takeover would more than compensate no doubt (?)

Thought for the day ..If there's a takeover, would it be fair to say "it's an ill wind that blows no good" ?

 

[Kauri]

New Equity injection - would that usually mean drop in share price? (with options to compensate?). Of course takeover would more than compensate no doubt (?)

Thought for the day ..If there's a takeover, would it be fair to say "it's an ill wind that blows no good" ?

This comes in under the rumour banner I know but I hope it gets past the mods!!! Just had brekkie at the local village and got around to talking about FMG. A couple of blokes who work in the city suggested that I might not be seeing the Forrest for the trees. Suggested I look at MOL. Apart from the fact that their price and vol has been very similar over the past few days and the fact that Twiggy holds around 25% of MOL via .20c options issued when MOL listed (also approx 25%?? of FMG via .08c options ) I don't see any other similarities..

 

[Little1]

Did anyone notice the seller with 11700 and the buyer for the same quantity with a 40c spread betwwen them today? Can anyone tell me what that was about?

I don't know if it was the same person with $200k trying to manipulate the market, but I'm awfully suspicious.

 

[Kauri]

May correct back for a C leg yet, or possibly has already started into the 5th leg. Whichever, still looks positive for a while yet??

 

[Kauri]

Have added to my ongoing long position.. possibly the start of the 5th leg?? (is this post 100 characters long, it must be now).

 

[michael_selway]

Have added to my ongoing long position.. possibly the start of the 5th leg?? (is this post 100 characters long, it must be now).

Hi Not Bad

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS -1.0 -48.4 -51.5 149.3
DPS 0.0 0.0 0.0 0.0

thx

MS

 

[astroboydivx]

Have any of you guys read the Eureka Report article (subscribers only) by Charlie Aitken about Fortescue Metals?

In it he says this:

"Let’s assume Fortescue decides to go straight to production of 120 million tonnes a year. That decision needs to be made by August this year. That would require bond holder approval, which I suspect would occur. Fortescue keeps all the contractors on site, and they go for it. The 120mtpa scenario sees four berths, three shiploaders, 10 million tonnes of stockpiles at the port, a double train loop with 1x2 car unloader, and 1x4 car unloader. It's all additions to what will be existing infrastructure, and I think it's unrealistic to consider Fortescue producing 45 million tonnes a year. Under the expanded production scenario, it would be producing 120 million tonnes in 2011-12.

At a margin of $40 a tonne, 120mtpa means EBIT of $4.8 billion a year. Interest costs will be about $300 million assuming stage two is debt-funded. Deducting corporate tax of 30% leaves NPAT of $3.15 billion, earnings per share on the current capital base (264 million shares) of $11.90 a share.

No, that is not a typo. The scenario above sees Fortescue with 2011-12 earnings per share of $11.90, which puts the stock on a prospective 2011-12 price/earnings multiple today of 1.87 times. The stock will have a tonne of free cashflow, and should be able to maintain a 50% payout ratio. The dividend yield is potentially extremely attractive. "

Source: www.eurekareport.com.au

Thoughts?

 

[Kauri]

Have added to my ongoing long position.. possibly the start of the 5th leg?? (is this post 100 characters long, it must be now).

Have taken 2R profit on the short term portion of trade (too gappy to set and let it hit a decent stop) , now have original and 2 pyramid longer term trades on with stop at low of recent W4 .

 

[Kauri]

And away from the hype of the BHP-RIO sideshow FMG has quietly gone about adding 20% since its breakout from the W4 triangle over the last week.... thats 200% on the margin for a 10% deposit DMA CFD... or 400% on the margin for a 5% deposit GSL DMA CFD ...

 

[Kauri]

I hope that no-one tells this mob that the XMJ is down the best part of 2% so far today....... (how do you count 100 characters??)

 

[Kauri]

Not to mention his holdings in MOL and the large chunk of NIA that he will end up with... 73, 76, 79, 82, 85, 88, 91, 94, 97,100..

Iron ore baron Andrew Forrest became the State’s first triple billionaire yesterday, two months to the day after cyclone George tore through the Pilbara, killing two workers at a construction camp run by his company, Fortescue Metals Group.

The maverick mining entrepreneur achieved the milestone when shares in Fortescue touched a record $29.56, valuing his 102.3 million shares at a neat $3.02 billion, less than four years after he acquired them at just 8 ¢ each.

Incredibly, the one-time promoter of alpaca farming achieved the mark just eight weeks after becoming a double-billionaire in the immediate aftermath of cyclone George.

Shares in Fortescue, which is building a $3.7 billion iron ore venture that Mr Forrest believes can rival the giant Pilbara mines of BHP and Rio Tinto, have risen more than 20 per cent this week alone despite the controversy surrounding Fortescue’s decision not to evacuate its Pilbara sites before George’s arrival, and criticism of its subsequent handling of calls for compensation.

Investors have also seemingly ignored Fortescue’s warning that construction delays have pushed back its first iron ore exports from Port Hedland by at least six weeks to May next year.

Instead, they have been caught up in the takeover frenzy that has captivated investors as international miners battle for new sources of materials to feed China’s insatiable economy.

Fortescue initially plans to produce at least 45 million tonnes of iron ore a year but hopes to treble its output by early next decade, putting it on a neareven footing with BHP.
JOHN PHACEAS The West Australian

 

[Miner]

This is my first entry in this forum.
First call is on FMG. What is the secret with Twiggy? Whatever he touches sees gold. FMG has not produced yet but see the share price: wow. It is reaching BHP share price with so much publicity against him. Has any one read about Charlie Atkinson's report? He predicted the price is $100 to be in one year's time.
Some one recommended it at $2 price I did not believe him. Then it goes up and up and I never had the guts to put money on it.

Look at NIA and Twiggy just touched it. Price has gone up.
Will it be a bubble or just a too hot pick? Your thoughts please.

Regards
Miner
13 May 07

 

[michael_selway]

Have any of you guys read the Eureka Report article (subscribers only) by Charlie Aitken about Fortescue Metals?

In it he says this:

"Let’s assume Fortescue decides to go straight to production of 120 million tonnes a year. That decision needs to be made by August this year. That would require bond holder approval, which I suspect would occur. Fortescue keeps all the contractors on site, and they go for it. The 120mtpa scenario sees four berths, three shiploaders, 10 million tonnes of stockpiles at the port, a double train loop with 1x2 car unloader, and 1x4 car unloader. It's all additions to what will be existing infrastructure, and I think it's unrealistic to consider Fortescue producing 45 million tonnes a year. Under the expanded production scenario, it would be producing 120 million tonnes in 2011-12.

At a margin of $40 a tonne, 120mtpa means EBIT of $4.8 billion a year. Interest costs will be about $300 million assuming stage two is debt-funded. Deducting corporate tax of 30% leaves NPAT of $3.15 billion, earnings per share on the current capital base (264 million shares) of $11.90 a share.

No, that is not a typo. The scenario above sees Fortescue with 2011-12 earnings per share of $11.90, which puts the stock on a prospective 2011-12 price/earnings multiple today of 1.87 times. The stock will have a tonne of free cashflow, and should be able to maintain a 50% payout ratio. The dividend yield is potentially extremely attractive. "

Source: www.eurekareport.com.au

Thoughts?

EPS of $12, so fwd PE of 10 = fair value, imo its worth $120 potentially

What risks does thsi compnay and the industry its in have?

thx

MS

 

[reece55]

Kauri
You still on this one in your long term hold position??? If you are mate, you have nerves of steel, cause I think I would have cashed in today if I had been on it.

What a gap up today.... In 10 trading sessions, the stock has $14.65 and the 52 week low is $6.00, which is more than a 1/6th of where we are now. All bow down to Twiggy!!!! This has easily got to be the most parabolic share in the ASX 200, it's just incredible........

In saying this however, how much longer can the FMG machine keep going up? If it retraces from this high today, based on Fibs we could see some very volatile times???

Look at NIA however, it's worth 8x what it was before Twiggy announced he would be stepping on the board! The power that one man yeilds in this market is astonishing.....

Cheers

 

[bigdog]

There are 10 more trading days in May!!!

Fortescue's shares soar 68% in May
17-May-07 by AAP
http://www.wabusinessnews.com.au/en-story.php?/1/52393/Fortescue-s-shares-soar-68-in-May/dba

The share price of Fortescue Metals Group Ltd had another strong run today, following the announcement of a revised iron ore off-take agreement taking its total share price gains for May to an extraordinary 68 per cent.

Today's off-take agreement, with China's third largest steel mill, Tangshan Iron and Steel Group, help the price surge, with shares jumping 11.6 per cent.

Shares in the company closed at $37.40 today, compared with the May 1 share price of $22.25.

The deal with Tangshan, China's third largest steel mill, could be notionally worth up $12.14 billion to Fortescue and mirrors a similar deal with China's largest steel mill, Baosteel.

The 10-year offtake agreement covers a first-phase quantity of five million tonnes a year of Fortescue's initial 45 million tonne-per-annum output from its Chichester Range iron ore mine in the Pilbara region of Western Australia.

Tangshan has committed to purchase a further minimum of 15 million tonnes annually of Fortescue's planned expanded production.

The pact replaces and expands an existing offtake agreement between the parties, allowing for an increase in volume and an adjustment to the type of ore to be sold.

Fortescue executive director Graeme Rowley said the offtake agreement signed with Baosteel in March gave the company credibility in the eyes of other steel mills.

"The moment Baosteel agreed, that obviously had a domino affect, which is enormously satisfying to us," Mr Rowley told AAP.

"It gave us credibility that the largest steel mill in China said we are going to go to the tune of 20 million (tonnes per annum) and everyone else said `we'd better get on this bandwagon'."

The Baosteel deal has been estimated by Fortescue as worth about $1.21 billion a year.

Fortescue's is expected to ship the first ore from its $3.7 billion Chichester Range project in mid-May 2008.

The company is slated to export about 25 million tonnes of iron ore in the first year from the mine, about 260 kilometres south-east of Port Hedland, before ramping up production to 45 million tonnes a year.

The company has plans to increase output to 60 million tonnes annually before further increasing output to 110 million tonnes per annum.

Mr Rowley said Fortescue had agreements with about 15 different parties and that there was continuing interest from Chinese mills, along with steel mills outside of China.

 

[reece55]

There are 10 more trading days in May!!!

Review your price data Big Dog.....

Close on 3 May = 22.75
Close today (16 May)= 37.40
Difference = 14.65
10 trading days

Struggle to see what was wrong with my comment mate.........

 

[krisbarry]

This hurts so damn badly...I would now be worth over $600,000 if I kept my orginal purchase from Aug 2004 at 64 cents.

 

[Kauri]

Kauri
You still on this one in your long term hold position??? If you are mate, you have nerves of steel, cause I think I would have cashed in today if I had been on it.


Cheers

Hi Reece,
Sold out 50% of my original and 2 pyramid longer-term trades as the rise has been too steep for mine, and can't find a logical place to set a stop... on the other hand if this turns into an overdue correction I am not convinced that it won't move on up further .. ..