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.