Project MAKE MONEY from BHP!
by, 15th-November-2007 at 10:04 PM (6672 Views)
BHP has fallen around 15% from its all-time highs now so it presents a good opportunity.
I'll just reinterate that this stock is the worlds biggest miner, it has all the fundamentals behind it like the Australian Cricket Team.
The world's biggest copper mine in Chille, Olympic Dam, Pilbara Iron Ore with its own rail line, plenty of other Zinc/Aluminum/Coal mines/projects and its bloody big petroleum division.
Is there any reason why this stock should fundamentally perform bad? No!
If you're worried about BHP going down I suggest you not look at the computer screen for several weeks/months, its extremely natural for predator stocks to go down when they make a bid.
There's no doubt that its takeover for Rio would be an expensive one, but just think about the upside it would have? Rio's big mines, Alcan, more Pilbara, Ranger mine.
A merge between BHP and Rio will take a year and could get knocked back by the EU, and I seriously doubt investors will focus on it too much till it passes all regulatory approvals.
BHP's P/E has fallen to around 14, almost 10% below the market and sectors average P/E of 16.
This is free money!
I keep topping up at the lines on my charts and I've also shorted 10% of the capital I have long - to the British variant of Billiton, which I've shorted to make money while the stock continues to fall in the short-term.
ALUE Company All Ords Sector
P/E ratio 14.78 16.45 15.42
Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 275.0 302.9 347.2 311.5
DPS 55.4 62.0 73.3 76.8
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