FMG - Fortescue Ltd

[hollowpoint]

it's pretty simple.... in order to make money out of FMG, I need the share price to increase (stop me if i'm going too fast)... it DOES increase, however it is VOLATILE and keeps dropping just as quickly... for the purposes of short to medium term investment, it is a DOG...

this is my opinion.... it's a dog. you are entitled to yours, of course.

 

[JackJackJack]

Which stock isn't a dog of an investment right now?
Although I admit FMG probably has the most fleas in my kennel currently.

 

[enigmatic]

I'm pretty sure you will find it hard pressed to find an "investment" i use that loosely as its the word you used. that hasn't Dropped considerably in the last few weeks.
The idea of an investment is its for the future not for tomorrow.
I would definitely say that FMG has been a terrible Trade had you bought at above the current price. But it is definitely not a bad investment. you generally have to wait 12months to get your annual return. a few rocky months shouldnt be weighed into your "Investments" performance unless it hits your stop loss price.

 

[diliff]

I'm pretty sure you will find it hard pressed to find an "investment" i use that loosely as its the word you used. that hasn't Dropped considerably in the last few weeks.
The idea of an investment is its for the future not for tomorrow.
I would definitely say that FMG has been a terrible Trade had you bought at above the current price. But it is definitely not a bad investment. you generally have to wait 12months to get your annual return. a few rocky months shouldnt be weighed into your "Investments" performance unless it hits your stop loss price.

OK, but what factors do you think are driving the price of FMG at the moment?

Obviously market sentiment is one, iron ore price another. It seems as though, at least when I've been paying attention, the price follows roughly what the miners are doing, only far more exaggerated. If mining stocks go down 1-2%, FMG seems to fall about 4-5%. I just don't entirely understand what makes it so volatile. I know its a company with a single focus - aggressively mine as much iron ore as possible, as fast as possible, and in that sense I suppose it is at the mercy of the market more than a lot of the other miners out there, but is there anything else at work here?

 

[agro]

FMG $8.88..... yeah, great.... this is starting to be a real dog of an investment... everyone says but wait, it will come back up, but it just goes straight back down again...

this thread is starting to sound like a broken record

if you think it is going to go down further - then stay out of it, simple as that! find another stock better than FMG to invest in

sentiment is what drives a share price.. at the moment it is negative due to the global markets, yes FMG gets hit the hardest but when the market recovers (eventually) it will recover the fastest (imo.. hence the sharp declines and rises)

Fortescue still remains Fortescue, nothing has changed, only the share price, iron ore will still be in demand for the next few years, twiggy still has his plans..

that's all, i don't think i will bother adding my further , getting a bit repetitive of myself, maybe until some significant news comes out, or market rallies again..

best to sit on the side and don't get run by your emotion

 

[impala_group]

OK, but what factors do you think are driving the price of FMG at the moment?

If mining stocks go down 1-2%, FMG seems to fall about 4-5%. I just don't entirely understand what makes it so volatile. I know its a company with a single focus - aggressively mine as much iron ore as possible, as fast as possible, and in that sense I suppose it is at the mercy of the market more than a lot of the other miners out there, but is there anything else at work here?

Look, FMG is a new a player in the iron ore industry which as you well know is dominated by BHP & RIO.
The first shipment for its ore was what... may 08 i think?? There are alot of reasons why FMG is very volatile at the moment. In my opinion this is what really matters:

1. The bond legacy issue and rapid short term company growth - the talk about a spin off company - (West Pilbara Iron Ltd). Not really a biggie

2. The ailing global economy and the impact this will have on china's growth (china being the biggest market for iron ore) - there is already a slow down in growth in the chinese export market, rising inflation, the cost of food and fuel etc. All this factors are not favorouble to any trade....and they are global.

3. Many investors expect FMG stock to underperform at first - now that they have fully entered the iron ore trade.The stock then will find its place based on the company's perfomance in delivering.

Basing ourselves on past achievements so far....i highly doubt that this will be the case. So when these guys are dumping stock....buy them!! Look at the long term prospects of the company.

On a good note though, FMG controls enormously fields of iron and if takeovers are anything to go by in evaluating any industry: Then Sinosteel's interest in Midwest should guide you on how important this resource is to the developing nations.
Also its worth mentioning that Sinosteel and Baosteel have very strong interests in FMG as well. (they are the biggest state owned steel manufacturers in China - they must know their market needs- this is an assumption here: Do some research

I could go on all day.....my verdict: If you can....grab yourself these bargains and surf the wave. The stock exchange is driven by speculation.... ask questions, find answers and then just do it!!! Grab the profits when you can, but as the great one says...."dont loose money"

 

[renim]

broken record, hey. what about the hackneyed phrase, In the short term the market is only about popularity but in the long term the market is about value.

fmg seems to attract shorters, its growth has been spectacular for some and unbelievable for others. if you buy them using margin, expect to have your stop losses tested, keep away. short term shorters make money from other people stop losses. when the market goes bear, fmg gets savaged.
but
fmg fundamentals keep getting less risky and are still phenomenal. 08'09 ebitda of 3.4bill (just bigger than wow) do justify its market cap (back at $12 a share) and fmg has realistic options to quadruple. their cost base is the same as Vale or bhp-tinto, very low. target valuations of fmg may seem absurd, but they have some fundamentals behind them not sentiment, and so fmg resumes it climb upward.

as for story, unless china stops urbanizing, globalising and industrializing, then their demand for steel will be strong. currently i'ld guess china accounts for 35%-40% of world steel production. and for GHG, steel is better than concrete.

 

[diliff]

Well, looking at the UK Google Finance page (http://finance.google.co.uk/finance), FMG might be in for a rough ride tomorrow. Basic materials down 3.7%, BHP Billiton down 4%... Might be knocking down previous support levels around the $8.8 mark. We shall see.

 

[enigmatic]

Offcourse FMG would be more volatile.
BHP and RIO are proven companies with Proven Profit, these two companies have proven there capacity as Global mining companies.
FMG is still just small fish in a big pond trying to prove itself.

so i guess the point is BHP and RIO are "Known risk" FMG is an "Unknown risk"
we still havent seen a quartly report which indicates there profit. does FMG even have a positive P/E ratio.

 

[LeeTV]

Well, looking at the UK Google Finance page (http://finance.google.co.uk/finance), FMG might be in for a rough ride tomorrow. Basic materials down 3.7%, BHP Billiton down 4%... Might be knocking down previous support levels around the $8.8 mark. We shall see.

Good call. FMG opened lower and has dropped some 4% in the opening minutes of trade to $8.61... wish I had some more capital! Stuck what I had left in to AVO yesterday.

 

[hollowpoint]

My first buy in was at 9.31, then 9.35, then 11.35.... then it dropped after that. The bulk of my shares were bought at 11.35 though....

One could argue that no-one could be that stupid, but honestly, I thought that we were going to break the $15 a share mark....

So, now it is currently at 8.57, down almost $3/share from the bulk of my buys, I somewhat regret it. It was bought on emotion too, as my partner works for a company owned by FMG.... dumb de dumb dumb...

I guess you live and learn. Mind you, all I need is a share price of $15 to make me happy.... but because of this whole Western Pilbarra thing, is that even possible? What I mean to say is is there a limit to how high it can go?

 

[njc.corp]

My first buy in was at 9.31, then 9.35, then 11.35.... then it dropped after that. The bulk of my shares were bought at 11.35 though....

One could argue that no-one could be that stupid, but honestly, I thought that we were going to break the $15 a share mark....

So, now it is currently at 8.57, down almost $3/share from the bulk of my buys, I somewhat regret it. It was bought on emotion too, as my partner works for a company owned by FMG.... dumb de dumb dumb...

I guess you live and learn. Mind you, all I need is a share price of $15 to make me happy.... but because of this whole Western Pilbarra thing, is that even possible? What I mean to say is is there a limit to how high it can go?

$3.00 a share down- what do u do-

1.do u need the money asap

2.u got more captital to buy at the cheap price it is

3.u got a stop

dont take it to heart-thats just the way it rolls-

Keep your chin-up

Thanks

Nick--

 

[hollowpoint]

1.do u need the money asap - NOT REALLY

2.u got more captital to buy at the cheap price it is - UNFORTUNATELY NO

3.u got a stop - MY GIRLFRIEND'S WHINGEING

 

[agro]

1.do u need the money asap - NOT REALLY

2.u got more captital to buy at the cheap price it is - UNFORTUNATELY NO

3.u got a stop - MY GIRLFRIEND'S WHINGEING

if you don't need the money asap, and want to save 50% discount of tax (depending ofcourse how much you have invested in it),

it would be wise to leave it there untouched for the time being, people love to make money over night but it rarely occurs..

patience is a virtue esp. when it comes to the stockmarket,

don't be shortsighted all i can say

 

[oldblue]

I've been reading up on FMG for some time now and have finally decided ( I think) to buy some when the SP shows a bit of strength.
Seems to me that a lot of contributors to this thread are traders and I can't see that this is a trader's stock at the present time, rather it's one for the long haul as it ramps up production, pays down some of that debt, whittles away accumulated losses ( $68m last year alone ) and finally gets down to paying good divs. Which I'm pretty sure it will, in time.
Just wish I'd bought a couple of years ago!

 

[renim]

fmg dropped about 30% shortly after my first entry into it. that is now the second best purchase of stocks in my life

 

[hollowpoint]

you lost 30% and it's the 2nd best investment you have made? Did i read that correctly? lol

Buying FMG is much like

I am down $20k on it so far....... whilst that is not disastrous, I'm not too impressed.

I actually thought that i could make maybe 20% on my money in around 1 month.... hahahahahahahaha..... idiot......

 

[Nesa]

BHP and RIO both down 3% as of now, FMG up 1.70%

on the back of a 2.52% gain on the DOW



- hollowpoint, what did you buy FMG at?

 

[hollowpoint]

too much....

9.31, then 11.35... then a small parcel at 9.15.... most was at 11.35 though..... duh!

 

[subaru69]

I fell asleep in front of Bloomberg (or the like) a few nights ago and I woke up and on the screen were 2 points (therefore I can't put any context to this):

1. Sell into any rally
2. Go long on commodities

The conundrum is that FMG seems perfectly good to 'dollar cost average' (yes I know there are varied opinions and read the thread on it a while ago) into, thus satisfying Point 2. However it would contradict indirectly Point 1. as it's basic premise is that the market hasn't found a bottom and we are just seeing a series of Bull Traps.

Funnily enough commodities have gone to POO (pls excuse the double entendre) in the last 24hours, so the magical/prophetorial nature of my 'vision' is likely to be crap anyway.

PS- if anyone has the answer to life's mysteries please feel free to PM or if you're motivated enough why not start a new thread