RIO - Rio Tinto

[vishalt]

Yes, yes it is.

I for one refuse to sit on the sidelines though!

P/E's get out of hand when they reach like 20+ anyway, so BHP/Rio are fair value, I'd start getting worried when they reach 19+, but right now just enjoy the bull.

 

[mlevit]

I had bought into RIO when it was $88 in September and have seen a nice escalation in price over the past few months.

Taking into consideration last Thursdays $115 price, would you guys hold RIO (long term)? or would I be better off selling and awaiting the talked about US market recession to buy back in again?

 

[vishalt]

Taking into consideration last Thursdays $115 price, would you guys hold RIO (long term)? or would I be better off selling and awaiting the talked about US market recession to buy back in again?

I'm holding on, most of Rio's profits are from suppling China, not UslessSA.

And what is this recession people speak of? The one that they kept talking about since 2003 that still hasn't happened lol?

 

[explod]

I'm holding on, most of Rio's profits are from suppling China, not UslessSA.

And what is this recession people speak of? The one that they kept talking about since 2003 that still hasn't happened lol?

I held RIO up to a month ago and got out at $112. Had a friend works with NAB was in US recently and said many over there are accumulating gold and gold stocks. I have my portfolio now primarily in NEM and it is a blue chip gold co., was recently sold down due to some problems which it has now overcome and is on the rise again. Other aspect is that local gold stocks are being effected to some degree in the negative by our rising dollar. The correction is on in my view but the time line is in doubt. In the big fall of 1929 to 1933 it took that long to find the bottom. As with the US dollar fall. it has been massive but it has been gradual so few have taken a lot of notice. But if you put those things together then the smart thing to do becomes fairly clear.

I am looking to bottom trawl back into stocks like Rio and BHP after it all happens, but to me making money in the meantime is essential to my strategy. There is not enough in it for the old buy and hold strategy when currencies are losing value. The rise in the cost of goods such as food, oil, etc., is actually the loss of value in money.

 

[jurn]

LONDON, Nov 8 (Reuters) - BHP Billiton said on Thursday it had made a takeover approach to Rio Tinto in a move that could create a $300-billion-plus mining giant, but that its smaller rival had rejected the proposal.

Rio Tinto shares leapt as much as 24 percent in London after BHP, the world's biggest miner, said it continued to seek talks with Rio over its proposal.

"BHP Billiton now confirms that it recently wrote to the Board of Rio Tinto outlining a proposal in relation to a potential combination with Rio Tinto on terms incorporating a premium," BHP said in a statement.

"Rio Tinto rejected the proposal. BHP Billiton has again written to Rio Tinto and intends to continue to seek an opportunity to meet and discuss its proposal with Rio Tinto."

At 1110 GMT, Rio shares in London were up 20.7 percent at 5,250 pence, after hitting a record 5,399 pence. BHP was up 1.7 percent at 1,785 pence.

A marriage between BHP and Rio would assemble a massive controlling force across a range of industrial-use commodities such as copper, aluminium, iron ore and coal, but would likely face competition concerns.

"In preparing its proposal, BHP Billiton has examined in detail the regulatory issues and other practicalities of a combination," BHP said in its statement.

"There can be no assurance that any transaction or offer will result from BHP Billiton's proposal."

Long-standing speculation of a tie-up between BHP and Rio has gathered pace after Rio, the world's third-biggest miner, completed its $39.1 billion purchase of aluminium group Alcan on Wednesday.

BHP declined further comment. Rio was not immediately available. (additional reporting by James Regan in Sydney) (Reporting by Mark Potter, Editing by Dan Lalor and Quentin Bryar) ((mark.potter@reuters.com; +44 20 7542 7717; Reuters Messaging: mark.potter.reuters.com@reuters.net))

Keywords: RIOTINTO BHPBILLITON

 

[M34N]

Does anyone think it's strange that on a day like today, where the ASX was down over 2%, that RIO shares were actually up? I was watching their shares closely today, and noticed a strong bullish trend on it all day from around 10:20AM. Some people have inside knowledge of this proposed takeover/merger coming? I don't think in all the years I've watched the market that a stock like RIO has gone up 1% on such a negative day with no news at all to mention?

Watched a similar trend in London trading last night, where RIO was up about 3% early morning (but after the US trading session ended up only 0.4%) while the rest of the FTSE was down strongly over 1%. Seem strange to anyone else? This is not normal market behaviour!

 

[googly]

RIO NOW UP 30% IN LONDON.

THIS WILL GO TO $140 ON THE ASX TOMORROW!!!!!!!!!!!!!!!!!
People are going to make so much money it will be sickening!!!!!

 

[dutchie]

G'day M34N

Nice pickup and observation regarding RIO's up move on a down day.

Theres ALWAYS inside information.

Cheers

Dutchie

 

[M34N]

G'day M34N

Nice pickup and observation regarding RIO's up move on a down day.

Theres ALWAYS inside information.

Cheers

Dutchie

Yeah seemed strange to see this announcement today after the movements in RIO, something is definitely going on there, that's no coincidence. Made me a little annoyed because I sold RIO shares just today for $110.00 LOL oh well

 

[overule]

RIO NOW UP 30% IN LONDON.

THIS WILL GO TO $140 ON THE ASX TOMORROW!!!!!!!!!!!!!!!!!
People are going to make so much money it will be sickening!!!!!

For ASX, i don't think it will be up by that much given this announcement.

"Rio Tinto rejects bid from BHP Billiton"

http://news.ninemsn.com.au/article.aspx?id=66849

 

[vishalt]

For ASX, i don't think it will be up by that much given this announcement.

"Rio Tinto rejects bid from BHP Billiton"

http://news.ninemsn.com.au/article.aspx?id=66849

Yes it will?

It DOESN'T matter if Rio rejected it, all institutions/brokers/speculators care about is that BHP is GOING AFTER Rio, that its actually made a bid, rejection comes after.

 

[Rainmaker2000]

I love this type of merger.....it only happens at the top of the cycle.....its a funny arrangement cause BHP will exchange its over priced shares for RIO's more overpriced shares and every just continues on with life and the corporate egos are soothed and they get higher paychecks...the investment bankers love it and the lawyers, there are many competition issues.....Remember Time/Warner and AOL......Gee it would have sucked to be a Time shareholder and to a lessor extent it sucks to be a BHP holder.....The 'professional shareholders' will cheer all of this on but this is a clear sell time on BHP......not that this is advice you all

 

[The Once-ler]

I love this type of merger.....it only happens at the top of the cycle.....its a funny arrangement cause BHP will exchange its over priced shares for RIO's more overpriced shares. The 'professional shareholders' will cheer all of this on but this is a clear sell time on BHP......not that this is advice you all

Yeah, good one.

And I remember people saying the same thing when BHP bought western mining and Olympic dam. The bargain of the century in hindsight and not the top of the cycle.

 

[Rainmaker2000]

Mate, I must confess I thought BHP's buy of Western Mining was an astute deal....an exceptional buy.....imagine one of the world's best nickel deposits being a massive uranium pit at the start of the biggest uranium boom ever....you can see what a deal it was cause their high price bid was a killer bid......and then it was a seemless integration of assets.....this one well...hehehe...it certainly is a game changer

 

[Garpal Gumnut]

Interesting an excellent perspective how it has panned out Garpal, well done!

Ironically your post was made 1 day befor the all time high, but low today was $88.01, an amazing retracement indeed. The $23 theory seems to have some substance albeit I'm not sure why. Hope you shorted this one, cheers.

Thanks Gundini, sorry for the late reply. I didn't see your post. I haven't shorted RIO at any stage as was punting on a t/o. I was short of cash in August though so didn't get any on those beaut lows. Isn't greed n fear good for the soul!!

The next "$23" point is $134 and then $159, at which point I think I'll rollover into BHP and take an overseas trip and watch that little bugger get into 3 figures.

I enclose a weekly chart of RIO.

gg

 

[michael_selway]

Thanks Gundini, sorry for the late reply. I didn't see your post. I haven't shorted RIO at any stage as was punting on a t/o. I was short of cash in August though so didn't get any on those beaut lows. Isn't greed n fear good for the soul!!

The next "$23" point is $134 and then $159, at which point I think I'll rollover into BHP and take an overseas trip and watch that little bugger get into 3 figures.

I enclose a weekly chart of RIO.

gg

Are you sure BHP is still bullish at current prices (to $100+)?

BHP - Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 275.0 301.6 346.8 312.2
DPS 55.4 62.1 73.0 76.3

RIO Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 686.6 653.5 833.4 966.8
DPS 131.4 130.9 134.5 141.4

thx

MS

 

[vishalt]

I'm done trading Rio Tinto, it was an exceptional stock to play in , what a beautifully managed company too, it played its cards well.

It's way too expensive to buy even in small amounts at those prices though, and the 22 P/E is quite scary, time to switch to the other big guns: BHP/Xstrata/CVRD.

 

[Garpal Gumnut]

I'm done trading Rio Tinto, it was an exceptional stock to play in , what a beautifully managed company too, it played its cards well.

It's way too expensive to buy even in small amounts at those prices though, and the 22 P/E is quite scary, time to switch to the other big guns: BHP/Xstrata/CVRD.

I wouldn't not invest in stocks with a high price. I'll post a chart in the BHP thread later as I believe it is capable of the same trajectory as RIO

gg

Are you sure BHP is still bullish at current prices (to $100+)?

BHP - Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 275.0 301.6 346.8 312.2
DPS 55.4 62.1 73.0 76.3

RIO Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 686.6 653.5 833.4 966.8
DPS 131.4 130.9 134.5 141.4

thx

MS

Michael, I'm not a funnymentalist, but accept your figures and take em on board. BHP has huge potential and with RIO assets will be a $100 stock soon. I've lived most of my life in towns/cities with a large BHP presence and respect their management style and assets. I'll post a chart in the BHP thread later to back up my projections. What these forward forecasts can't factor in is the vitality on the ground in these big mining operations. Given the right infrastructure, customers and luck, (yes luck with China, Aus governments etc.), a continuing bull advance is possible.

gg

 

[vishalt]

Thanks garpal,

I noted your $23 projections earlier and that was very good, post it soon id love to see what you think about it!

 

[gfresh]

$130 is just the beginning..

News over the weekend indicates BHP has secured another $US70B from Citigroup which could be added to their $140B offer of 3 for 1. This may allow them to try for a possible 4 for 1 to secure RIO.

Given current market conditions, would anybody agree that BHP would like to stitch this up as quick as possible, so their SP doesn't drop too much further? Hence costing them more for the bid? Also under British takeover rules, apparently they must launch another offer within 8 weeks if they are to do so.