FMG - Fortescue Ltd

[Miner]

According to these definitions, FMG is a growth stock then - current income is low due to self-funding expansion, expected to grow rapidly (40 - 50 - 160mtpa over the next five years), value may rise quickly (as evidenced up until June)

I hope you are not suggesting FMG to be one day as BHP or Rio. It will be too much expectation by any standard. FMG is okay for quick money earning but does not have the nerve to be a sustaining business like Rio or BHP. I could say so, because I have worked for all three and have seen their working very closely. Each has a plus point and minus point.

Rio is multi site and multi product operation, strong board management and very structured. They have grown by acquiring Hamesley, Alcan and others organically. Market price was not too hot those days

So was BHP grown by acquisition and growth in an almost monopolistic situation.

Unfortuantely FMG is a late arrival, working against too many odds, single product, WA site only, primarily driven by Graeme Rowley and Andrew Forrest (other directors are just lucky to be there), very much unstructured, very high risk driven and of course Andrew has lot of guts unlike other directors in Rio and BHP. FMG has some high risk with few great managers but if they leave the organisation then there could be disaster. Whereas BHP or Rio even the MD leaves - there will be some ripple but no storm.

 

[Trembling Hand]

how come every time i log on to aussie stock forums i notice FMG in the top 10 threads on the main page?

just goes to show, regardless of whether you like it or hate it, there is heated debate about the company


does this say something about its popularity

i couldn't careless about the chart, find me a chart that is trending up and i will buy stocks in that company..

if FMG being in the top 10 threads is not a predictor of popularity than can you explain to me what it is a predictor of?

i mean even the people not in favor of FMG and unlikely to hold it are posting!!

there must be a motive otherwise they would not be doing it

Actually Agro you got it all wrong here. Again bias unfounded by stats.

I ran a query on market cap to amount of post on ASF to find their 52 week return mid year.

I'm not at home at the moment and haven't access to my data but the basic finding of these stats were the companies that have higher posting per market cap than average were VERY crappy long term returns.

Bottom line stocks that people love are Sh!te investments. And I'm sure that they are even worse stats now.

find me a chart that is trending up and i will buy stocks in that company..

LOL. In that case why the hell would you buy or hold one thats going down.

 

[nunthewiser]

I ran a query on market cap to amount of post on ASF to find their 52 week return mid year.

I'm not at home at the moment and haven't access to my data but the basic finding of these stats were the companies that have higher posting per market cap than average were VERY crappy long term returns.

Bottom line stocks that people love are Sh!te investments. And I'm sure that they are even worse stats now.



.

thats bloody intresting actually ...... ive noticed things like this in other chats etc too ........ fms , ego , vcr many moons back etc etc etc the list is extensive

very intresting

would luv to see your data if u ever get the time later

cheers

 

[ROE]

BHP, Rio Must Share Rail With Fortescue
http://www.bloomberg.com/apps/news?pid=20601081&sid=ac5PBHxZZxv8&refer=australia

Woot! Finally some very good news for FMG.
Can I start the rumour mill with:
- BHP (or BHP/RIO) will fight this as hard as they can.
- When the aboves fail, BHP just launches a hostile takeover for FMG.

--
BluBoy

Here is another take
RIO and BHP address a while ago, anyone want their rail access need to fight them in court and in this environment they have cash to pro-long court case and make FMG burn even more money....

When you have +ve cash flow and incredible earning and you fight against someone who are burning cash, you can guess who will end up winning the fight .. and even if they lose they just charge FMG a nice chunk of money for their network access.

People will then lose patient and switch to invest in BHP/RIO instead

 

[prawn_86]

Actually Agro you got it all wrong here. Again bias unfounded by stats.

I ran a query on market cap to amount of post on ASF to find their 52 week return mid year.

I'm not at home at the moment and haven't access to my data but the basic finding of these stats were the companies that have higher posting per market cap than average were VERY crappy long term returns.

Bottom line stocks that people love are Sh!te investments. And I'm sure that they are even worse stats now.



LOL. In that case why the hell would you buy or hold one thats going down.

thats bloody intresting actually ...... ive noticed things like this in other chats etc too ........ fms , ego , vcr many moons back etc etc etc the list is extensive

very intresting

would luv to see your data if u ever get the time later

cheers

Def worth a new thread if/when you get the time TH.

I would also be interested in the results

 

[Frankhalo]

I hope you are not suggesting FMG to be one day as BHP or Rio. It will be too much expectation by any standard. FMG is okay for quick money earning but does not have the nerve to be a sustaining business like Rio or BHP. I could say so, because I have worked for all three and have seen their working very closely. Each has a plus point and minus point.

Rio is multi site and multi product operation, strong board management and very structured. They have grown by acquiring Hamesley, Alcan and others organically. Market price was not too hot those days

So was BHP grown by acquisition and growth in an almost monopolistic situation.

Unfortuantely FMG is a late arrival, working against too many odds, single product, WA site only, primarily driven by Graeme Rowley and Andrew Forrest (other directors are just lucky to be there), very much unstructured, very high risk driven and of course Andrew has lot of guts unlike other directors in Rio and BHP. FMG has some high risk with few great managers but if they leave the organisation then there could be disaster. Whereas BHP or Rio even the MD leaves - there will be some ripple but no storm.

Good post Miner, but lets balance it up too. Firstly lets also not place FMG with some junior IO play with 1 to 3 mta output, FMG 9 million odd tons in 6 months of operation, 57 odd ship loads to 27 different mills including Baosteel.
Its already placed as a top mid tier IO play. I can not find one article or ann that points out cancelled shipments, payment defaults or rejection of IO in regards to FMG operations. Yes their output target is now 80mta and expansion to 160mta, given current market climate, is on hold ( this is well documented ). Yearly production target is ever increasing and product is being shipped, if anyone can disprove this please post a creditable link. I'm not questioning current market / global climate but FMG continues to forge ahead on all fronts regardless, again post it if you got it and prove me wrong.

PS. Not some article that states the world has turned to Kaka, one that clearly states FMG operations with the above mentioned points.....

Thankyou

 

[Trembling Hand]

Yep I will start a thread on the stats I found when I'm home.

Was interesting. To compare where the interest lies and is that an indication of past or future performance.

 

[gav]

BHP, Rio Must Share Rail With Fortescue
http://www.bloomberg.com/apps/news?pid=20601081&sid=ac5PBHxZZxv8&refer=australia

Woot! Finally some very good news for FMG.
Can I start the rumour mill with:
- BHP (or BHP/RIO) will fight this as hard as they can.
- When the aboves fail, BHP just launches a hostile takeover for FMG.

BluBoy

I am positive I read somewhere that BHP would have to unload some of their Iron Ore projects if they were to successfully acquire RIO. If this is the case, I doubt they would be allowed take over FMG..

 

[gav]

Actually Agro you got it all wrong here. Again bias unfounded by stats.

I ran a query on market cap to amount of post on ASF to find their 52 week return mid year.

I'm not at home at the moment and haven't access to my data but the basic finding of these stats were the companies that have higher posting per market cap than average were VERY crappy long term returns.

Bottom line stocks that people love are Sh!te investments. And I'm sure that they are even worse stats now.

LOL. In that case why the hell would you buy or hold one thats going down.

T/H, Agro bought FMG for $2.95 and sold at just over $5. Yes he sold due to margin call, but still made a good profit with FMG. I dont see how this was a sh!te investment for him. If he had've sold FMG at a 50% loss like I did, then yes it would have been a sh!te investment. But then again, if I still held I'd be down even more. I'd rather be holding FMG than any of the smaller Iron Ore companies right now..

 

[Miner]

Good post Miner, but lets balance it up too. Firstly lets also not place FMG with some junior IO play with 1 to 3 mta output, FMG 9 million odd tons in 6 months of operation, 57 odd ship loads to 27 different mills including Baosteel.
Its already placed as a top mid tier IO play. I can not find one article or ann that points out cancelled shipments, payment defaults or rejection of IO in regards to FMG operations. Yes their output target is now 80mta and expansion to 160mta, given current market climate, is on hold ( this is well documented ). Yearly production target is ever increasing and product is being shipped, if anyone can disprove this please post a creditable link. I'm not questioning current market / global climate but FMG continues to forge ahead on all fronts regardless, again post it if you got it and prove me wrong.

PS. Not some article that states the world has turned to Kaka, one that clearly states FMG operations with the above mentioned points.....

Thankyou

Yes I agree Frank

My hands are itching to write but under confidentiality deed signed off with FMG I can not except quoting from press articles etc

But one think please remember those stock analysts with good suit and tie travel with industrialists see those things which are meant to be shown, read the report which are given to them, and if the future is rosy then read the roses but can not read beyond them.

It is better to use own research than relying on those analysts. If they were so smart why so many financial banks are getting bank rupt, why banks shares dived ?

Similarly if I am so smart why my stock and super investment got down by less than 50 percent?

I think it is our inherent greed where idiots like me tend to defy logic, miss the obvious and rely on hunches than rational analysis. Some of us are intelligent and they become Warren Buffet or likewise.

Sounding philosophical because there os hardly any silver line in the market to turn my nickel into silver

 

[bluboy]

I am positive I read somewhere that BHP would have to unload some of their Iron Ore projects if they were to successfully acquire RIO. If this is the case, I doubt they would be allowed take over FMG..

Ahhh crap - Facts getting in the way of a good rumour!

http://www.busrep.co.za/index.php?fArticleId=4120136
"Iron ore is the toughest obstacle since BHP and Rio are the second- and third-biggest iron ore producers respectively and would together command a 30 to 35 percent of the seaborne market, analysts said."

This leaves the 'run it through the courts' idea still in play... Are there any positive outcomes? I was looking forward to tomorrows action based on this news. (Even the US is looking green due to the housing data released!)

EDIT: Whoops - Back into the red... Although, they have only had a 2% swing today... Very stable compared to recent history.

 

[Miner]

It is good sign to see FMG has shot up today against the market factoring the rail news.

They do need the rail desperately as there is probably no people to execute them (?)

I heard from one of my colleagues that 200 people from Worley Parsons that are working on FMG expansion project has got a demobilisation notice effective on 7th of November 2008. (Demobilisation basically a protected contractual way of sacking for contracted people)

They just left a handful of people that are working on optimisation of mine site at Cloud Break and dredging boat at the port, the rest of the people are all sacked (all port, rail and Christmas Creek mine). WP promised them relocation.

Interesting news if it is true (PLEASE CHECK YOURSELF AND THIS COULD BE A RUMOUR TOO)

Disclosure : I do own FMG now and waiting for them to rot like pepper corn

 

[Rhynoceros]

Hey as obvious I'm new to this forum (so hi all) but have been lurking and reading for a fair while ,I have noticed that this stock continues to be pushed onto the front page.

I"m not sure if it is appropriate to post, what can only be rumors, but from reading another forum which posted what is claimed to be Citigroups recommendations on FMG as follows:

"Fortescue Metals Group Ltd (FMG.AX)
Site Visit – Commissioning Well Despite Mine
 Mine Constraint — Mine production constrained by overburden removal which
is behind schedule, but contractors on site to catch up. Production target
remains 45mtpa rate by year end and 55mtpa by end-1Q09. Production might
reach the 22mt target for 2008, but shipments likely to fall short. Other key
issue is getting moisture content down to 7% target, currently ~9%. Rail and
port infrastructure is operating well and waiting to be pushed by the mine.
 Expansion Plans — Current economic/credit crisis has slowed expansion
ambitions to what can be funded by cash flow. Revised plan is 80mtpa by end-
2009, 120mtpa by end-2010 and 160mtpa by end-2011. Still very ambitious
targets in an over-supplied market, but if credit and iron ore markets improve
in 2H09, expansions could be back on the fast-track. Capex A$2b+ to get to
80mtpa, additional A$2.5b to get to 120mtpa and another A$2.5b to reach
160mtpa, all excluding leased mine fleet.
 Iron Ore Market — In deteriorating iron ore market, we forecast a 20% price cut in
2009, but risk is to the downside given spot price collapse to US$67/t delivered
implies a 33% decline. Price risk is a threat to funding expansion capex from cash
flow, but could be largely offset by the A$ fall, which is proving an unexpected
kicker under current contract prices (realising A$120+/t v budget of A$95/t).
 Contracts — FMG has had only had one customer fail to take a shipment due to
inability to get a letter of credit, but this shipment was taken by another
customer. Whilst there are no sales into the spot market and off-take contracts
up to almost 100mtpa, the risk of customers delaying/cancelling shipments in a
rapidly softening market is a very real and significant risk.
FMG.AU (Y/E Jun) 2008A 2009E 2010E 2011E
Reported Profit (A$m) -2,516.2 1,519.7 1,594.6 1,838.3
Core Net Profit (A$m) -89.9 1,519.7 1,594.6 1,838.3
Core EPS (A ¢) -3.2 53.9 56.6 65.2
Core EPS Growth (%) -158.9 1,780.1 4.9 15.3
PE Ratio (x) -89.7 5.3 5.1 4.4
DPS (A ¢) 0.0 0.0 0.0 0.0
Dividend Yield (%) 0.0 0.0 0.0 0.0
Franking Rate (%) 0.0 0.0 0.0 0.0
P/Operating Cashflow (x) -22.0 4.2 3.7 3.1
ROE (%) na na 281.7 72.1
Source: Powered by dataCentral
Buy/High Risk 1H
Price (27 Oct 08) A$2.88
Target price A$4.50
Expected share price return 56.3%
Expected dividend yield 0.0%
Expected total return 56.3%
Market Cap A$8,085M
US$5,040M
Price Performance (RIC: FMG.AX, BB: FMG AU)
See Appendix A-1 for Analyst Certification and important disclosures.
Clarke Wilkins1"


The forum was HotCopper if these sort of post are inappropriate i apologise and will delete my post .

For what its worth I do currently hold a small parcel of FMG.

 

[treefrog]

It is good sign to see FMG has shot up today against the market factoring the rail news.

They do need the rail desperately as there is probably no people to execute them (?)

I heard from one of my colleagues that 200 people from Worley Parsons that are working on FMG expansion project has got a demobilisation notice effective on 7th of November 2008. (Demobilisation basically a protected contractual way of sacking for contracted people)

They just left a handful of people that are working on optimisation of mine site at Cloud Break and dredging boat at the port, the rest of the people are all sacked (all port, rail and Christmas Creek mine). WP promised them relocation.

Interesting news if it is true (PLEASE CHECK YOURSELF AND THIS COULD BE A RUMOUR TOO)

Disclosure : I do own FMG now and waiting for them to rot like pepper corn

collegue advises he rang FMG and they pretty much confirmed saying it is "precautionary" and that 45mtpa target for eoy still on track

 

[adobee]

We need to love this kind of stupidity, this is the kind of people that help others to get out of bad businesses and save some of their capital.

Keep buying as much as you can so the poor shareholders can sell to you as much as they can.

Copper dropping to $1.76 @ the moment.

WBII

Lets see.. you and the other 'poor shareholders' you speak off are keen as hell when the price is $13, the market is hot and the market cap is around $40,000 miliion.. I am buying their shares off them at $2.80 when the market cap for the same company is around $8,000million and all sentiment is doom and gloom.. I am buying at a 80% discount and you are suggesting that I am the one who is going to loose my money.. Because you have just taken a crazy lose and think the world is going to end dont hate on the person who has balls to buy when everyone else is in panic.. Perhaps check out what your mate Warren Buffet 1 is doing...

 

[CapnBirdseye]

It is good sign to see FMG has shot up today against the market factoring the rail news.

They do need the rail desperately as there is probably no people to execute them (?)

I heard from one of my colleagues that 200 people from Worley Parsons that are working on FMG expansion project has got a demobilisation notice effective on 7th of November 2008. (Demobilisation basically a protected contractual way of sacking for contracted people)

They just left a handful of people that are working on optimisation of mine site at Cloud Break and dredging boat at the port, the rest of the people are all sacked (all port, rail and Christmas Creek mine). WP promised them relocation.

Interesting news if it is true (PLEASE CHECK YOURSELF AND THIS COULD BE A RUMOUR TOO)

Disclosure : I do own FMG now and waiting for them to rot like pepper corn

This probably has more to do with a design handover than any cancellation of projects. I'm fairly certain that this phase of the the expansion is going ahead, em and thats about all i can say.

 

[Miner]

This probably has more to do with a design handover than any cancellation of projects. I'm fairly certain that this phase of the the expansion is going ahead, em and thats about all i can say.

Thanks my friend
Just watch WOR Worley Parsons share price if it tells you any story here to connect with FMG precautionary measures

 

[agro]

http://www.asx.com.au/asxpdf/20081028/pdf/31d6dsy4g4s4q4.pdf

Call for Rail Co-Operation Agreement

if all three can be happy then its good

 

[CoffeeKing]

Posted on MSN 1840 hrs

defers iron ore expansion spending

http://money.ninemsn.com.au/article.aspx?id=656578

 

[renim]

FMG's delay by one year is also on Reuters
nb WP share price vs Asx index shown below
i suppose this means that cash is king and fmg wants some now.
still 55mtpa does place fmg as a small fish in bigboys ring as far as IO is concerned. (Vale, Bhp Tinto, FMG & Kumba)