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BHP - BHP Group

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At the risk of sounding like saying "I told you so"....

I TOLD YOU SO!!!!!!!!!!!!!!!!!!!!!!!!!!!
I TOLD YOU SO!!!!!!!!!!!!!!!!!!!!!!!!!!!
I TOLD YOU SO!!!!!!!!!!!!!!!!!!!!!!!!!!!
 
Shares all around this behemoth seem to be still banking gains day after day while BHP sits in the corner all alone like he missed the boat and doesn't know what to do. Would really like to see if the giant can break that titanium ceiling its been crouching under for ages, and soon.
 
Er, as of right now it's gained 20.7% off its 8 July low, in 13 and a bit trading days - that's an annualized rate of over 300% - and in that run there's only been one day when it closed below the previous day. Is there anything wrong with that? OK, BHP's a supertanker - sounds like you are looking for a jet-ski.
 
Mr_T said:
At the risk of sounding like saying "I told you so"....

I TOLD YOU SO!!!!!!!!!!!!!!!!!!!!!!!!!!!
I TOLD YOU SO!!!!!!!!!!!!!!!!!!!!!!!!!!!
I TOLD YOU SO!!!!!!!!!!!!!!!!!!!!!!!!!!!
Click to expand...

This was about 8 July I think.

Oh dear.



Doesn't pay to be too smug does it.

I suppose it could crash in the coming days and you can say it again.
 
kennas said:
This was about 8 July I think.

Oh dear.



Doesn't pay to be too smug does it.

I suppose it could crash in the coming days and you can say it again.
Click to expand...

lol, 8th July = swing lows; good run though

Lets see if your post coincides with the swing highs :
 
skyQuake said:
lol, 8th July = swing lows; good run though

Lets see if your post coincides with the swing highs :
Click to expand...
Could possibly, it's run pretty hard coming up to $38 resistance and the overall market is overcooked short term. Surely.

I stand by my post pointing to the goosishness of 'I TOLD YOU SO' ing at the drop to $32.

His original post on 9 June was:

My 5 cents: BHP is now trading on high p/e's (high teens). Given that its profitability will almost certainly decline next year, shouldn't there be a lot of downwards pressure on its share price?
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It did certainly tumble since then, but is back at the same spot. Let see...
 

I guess i would just like to see BHP (and all the other behemoths) break this super resistance they all seem to be stuck under.

Im biased because ive been in the red for over a year with BHP (capital all locked up missing out on many other good trades). It would be really nice to my emotions to see a long term trend going again.
 
http://www.businessspectator.com.au...for-BHP-pd20090804-ULAU8?OpenDocument&src=kgb

Commentary
5:36 PM, 4 Aug 2009 Robert Gottliebsen
The right man for BHP

Both Jac Nasser and John Schubert would have made excellent chairmen of BHP Billiton, but I am glad the BHP board chose Jac Nasser. At this stage of its development, the Commonwealth Bank needs the hand of John Schubert as chairman and it would not have been possible for Schubert to do justice to both positions. It will be a triumphant home coming for Nasser – one of the few Australians to become global CEO of a major international company.

Nasser is aggressive and likes to expand, which means that BHP will not be standing still, so don’t be surprised if BHP undertakes more acquisitions in 2010 and 2011.

I suspect it was Nasser’s global enterprise experience and his expansionary drive that made him the choice of Don Argus. The risk is that whereas Schubert is an experienced chairman in the Australian tradition, Nasser’s experience comes from the American tradition, which means that there will need to be some clear boundary-setting between Nasser and BHP CEO Marius Kloppers. This undoubtedly led some on the BHP board to favour Schubert. But Nasser’s position is not that different to the situation Argus found, when he shifted from being NAB chief executive to being chairman of BHP in 1999.

Argus would clearly love to complete the iron ore joint venture with Rio Tinto before stepping down.

I wrote about the Argus legacy on July 21. We are going to see more garbage come out in some media about how Argus overplayed his hand in pushing to have the Rio Tinto deal with Chinalco overturned. As readers will know, it was Chinalco who overplayed their hand by trying to gain control of Rio Tinto and skewer BHP, with 600 pages of side deals. Once the Australian government understood how the side deals were constructed (and I am sure Argus played a role in making sure Canberra did understand the side deals) then there was no way that the Australian government would have agreed to the Rio Tinto-Chinalco deal as proposed.

Argus has had many fine hours, but my favourite was when he convinced the BHP board to show the then-CEO Brian Gilbertson the door, when Gilbertson tried to shift the head office to London, with a series of major takeovers.

Jac Nasser and Marius Kloppers will have to face more flak from China, who lost face in the failed Chinalco deal with Rio Tinto. But if the iron ore join venture goes ahead, then the combined company will have the lowest cost iron ore in the world and will be an enormous power house.
 
Some reality for the ridiculous prices on BHP at the moment.. Wouldn't be surprised if the price comes off 10-20% in the next few months.

http://www.businessspectator.com.au...une-half-profits-to-plunge-UNBZU?OpenDocument

 
Good point mofra. That is the question indeed

But looking at some very rough figures pulled from aegies, they quote 19,000M NPAT for FY09 and EPS of 330 and PE of 11 which is a long way from 'ridiculously overpriced' at current prices?

Agreed it would have to be super bullish to think there wouldn't be some kind of retrace at this stage of the recovery and given the rally we've just experienced. But LT is it really 'ridiculously overpriced'?

Would it be foolish to assume that anything that's not unexpected in the upcoming report would result in a favourable reaction from the market? Seems to be the trend!!!
 
Seeing as their reports are in $USD, we'll use this for the basis of comparison..

http://www.bhpbilliton.com.au/bbContentRepository/docs/annualReport2008.pdf

2008 Annual report, full year earnings per share was 275.3cps

We already known what the first half (financial) year brings:

http://www.bhpbilliton.com.au/bbContentRepository/docs/2008InterimResultsNewsRelease.pdf

page 1: Basic earnings per share: 47c
taking our exceptional items it is 110.1cps

So exceptional items really bring down the first half. Mine closures such as Ravensthorpe, various writedowns, funds spent on RIO takeover attempt, etc I assume. Maybe you can look past them, I don't know.

Now if we look at like for like:

2008 half year:
http://www.bhpbilliton.com.au/bbContentRepository/bhpbInterimResultsHyEnding31Dec07.pdf

107.2cps after exceptionals..

From 107.2 to full year 275.3cps figure BHP obviously had a cracker in the 2nd half of that year, but in 2009 the 2nd half is likely to be well down, maybe less exceptionals this HY, but overall down.

So overall, first of all you've got a reduction from 107.2c to 47c in the first half. Now the second half of this year is a little hard to tell exact prices fetched (still well down on the peak of late 07/early 08), but if we take a stab at say 100cps (optimistic)..

100cps + 47cps = 147cps vs 275cps ($USD) or 46% down.

If you read the article I posted as well (from reuters), you can see forecasts are saying more than a halving of profit as well, so many of the analysts are very bearish too...

BHP is tipped to book a second-half profit of around $US4.07 billion before one-offs, down from $US9.37 billion a year ago.
Click to expand...

If we take the aussie EPS (from Commsec) which reads 285.4 for 2008, and take 46% off that.. 154.12cps. $38 per share / 1.5412 = 24x earnings! Even if my figures are right off the mark, and closer to 200cps, $38 / 2 = 19x earnings. See why I may not be crazy thinking it's overpriced??

You can also take a look at another known with the production report for the full year out which shows pretty much flat production across most segments. With no increase in production, and an average reduction in prices (in some cases significant), where's the extra profit coming from this year?

http://www.bhpbilliton.com.au/bbContentRepository/docs/2009Q2ProductionReport.pdf

Sure you can look at the future, and what may happen in future, with economies fully recovering quickly to 3% GDP, and other blue-sky events. These definitely aren't certainties yet.

Likewise, if you want to look forward, and read around, the next few months of the year may be a worry if China slashes business loans -- http://www.bloomberg.com/apps/news?pid=20601087&sid=a42KFUylZPog This may effect demand from miners such as BHP as Chinese companies may not have the funds to pursue big projects utilising steel, etc without funds on offer. Maybe that is just jawboning, but right up until June 2010, there's no guarantee of an improved outlook on profit for the year we are now in either.

Maybe 2011/2012 will be good, but that's a long way to be looking out, and I'm sure in the price will dip at some point before then.. whether it's based on the profit of this year, or the uncertainty of next.

We'll find out Wednesday though I guess the real numbers!
 
Is gfresh Ducati's love child?



So many fundamental valuations on complex companies become unstuck it's hard to know where the spin starts and ends.

What chance does an internet avatar have?
 
Numbers worse than expected. SPI just got smashed on that... recovering though.
lets see what happens in london tonite.

No buyback as well!
 
Numbers look stunning to me - take in the results preso.

http://www.asx.com.au/asxpdf/20090812/pdf/31k1xr3z7klk1k.pdf

Who seriously cares where the numbers come compared to analyst consensus?

The future is what drives the stock and BHP is cum massive upgrades when the weak analysts step up and start chasing sport numbers with their wrong commodity price forecasts

BHP just headlined US$1.92 EPS (about 16 times trailing) in a period of financial and economic chaos.

Commodities are again going-up and BHP has 12% gearing and is probably due a stonking buy back

Go the Big Australian
 
BSD said:
Numbers look stunning to me - take in the results preso.

http://www.asx.com.au/asxpdf/20090812/pdf/31k1xr3z7klk1k.pdf

Who seriously cares where the numbers come compared to analyst consensus?
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Surely that is above most expectations? Profit minus exceptionals down 30.2% is on the high side of information/expectations available on the world wide "inter-web".

Taking a rule of thumb AUD$1 = US83c EPS equates to 232c

At $37.99 ~ PE 16.4 which isn't hugely above sector ave of ~15 for a company with low debt and highly leveraged to any sort of recovery in commodity prices that have taken a battering over the past 18 months.

Rewards outweigh the risks for in the LT for mine. Holding, not trading.
 
I think it's pretty poor, while expected.. and actually lower than what I put above. It's no better or worse that many ASX200 companies, even our banks during a global financial crisis. A profit of -30% (-61% if you count these "exceptionals") is still hard to take as being "good".

mofra said:
Rewards outweigh the risks for in the LT for mine. Holding, not trading.
Click to expand...

Why not value it at $50, $60, $80, $100 ? Have to draw the line somewhere as to how far you want to look out and how much premium you want to give it for the future.

I like the company, I just think there will be plenty of opportunities to buy at a fair bit lower than the current premium.
 
skyQuake said:
Numbers worse than expected. SPI just got smashed on that... recovering though.
lets see what happens in london tonite.

No buyback as well!
Click to expand...

I do not hold but getting a hunch that the share price could go up actually after some initial drop

Why this guess :

Because the profit has dived down so market will react

Then analysts will realise that underlying current is good, Rio BHPB JV will be pushed up, iron ore prices are going up, primary loss is due to Ravensthrope write up - giving stainless steel a colossal loss,

If it was an ordinary company it would go for liquidation but BHP still has solid chunk of cash flow better than last year. That will be put back in large capital assets.

I am no analyst and it is primarily looking into technical strength.
 
0055 GMT [Dow Jones] BHP (BHP.AU), Rio (RIO.AU) expensive vs U.K. listings, says Southern Cross Equities Director Charlie Aitken. "BHP in Sydney now trades at a whopping 24% premium to Billiton in London, while Rio trades at an even larger 26% premium to its U.K. dual listing," says Aitken. "It concerns me that Australian investors, due to the larger index weights of BHP and RIO in domestic indices, are significantly overpaying for BHP and RIO in Sydney." Recommends investors switch to U.K-listed shares of both companies. BHP flat at A$37.61, Rio down 0.4% at A$57.67. (DWR)


I thought the above was interesting.
 
Clearly BHPB's corporate culture hasn't improved. It simply doesn't understand that what is good for Marius (a 50% wage rise announced yesterday) is good for any BHPB employee. Or in payouts for those who lost jobs in the nickel operations.
 
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