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Paladin vs. BHP

Discussion in 'ASX Stock Chat' started by PennyHopeful, Nov 27, 2007.

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  1. PennyHopeful

    PennyHopeful

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    I know this is simplistic but here is my situation. I have around 25k worth of both PDN and BHP... I was lucky enough to get on SMM at a very cheap price so im way ahead on PDN. Considering that BHP has the biggest uranium resource in the world im wondering why i shouldnt sell all my PDN (forget about CGT) and buy up big on BHP.. im bullish on uranium and i realise that it is only a small part of BHPs operation but it seems a safe bet to me at this point. Any comments welcome.
     
  2. tronic72

    tronic72

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    Re: Paladin Vs BHP

    A few things to keep in mind....

    You wouldn't be getting in on the ground floor with either company. Both companies have experienced huge growth recently and BHPs prices are commanding premium $$ at the moment.

    What is your strategy? Do you want to make your money over one day, one month one year or long term. Do you want dividends? Will you sell them?

    Part of the "problem" in buying BHP is you aren't just getting a Uranium producer. You are getting the single biggest most profitable miner in the world (if it's RIO correct me) Paladin on the other hand are just specialising in Uranium.

    At the moment I think Paladin represents better value but you are getting less for your money.

    If you supply more information regarding your trading strategy, I think members will have a better chance of choosing the stock that's suited to your needs.
     
  3. jeffTH

    jeffTH

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    Re: Paladin vs BHP

    Just to add a little more fuel to your fire, you may like to look at EQN which is mining in Zambia. They are currently conducting a uranium feasibility study alongside their main game which is copper.
    I like EQN for uranium as they are not restricted by Aust legislation, etc as they are not mining in Aust. At $4.95 yesterday, they are not over-priced.
    I have BHP but see them more as an iron ore play in the near future.

    Good luck
     
  4. Broadside

    Broadside

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    Re: Paladin vs BHP

    if you want Uranium exposure, U is only a small part of BHP's production profile even after Olympic Dam upgrade. BHP is a fantastic company but not the best way to get good exposure to Uranium upside in my opinion.
     
  5. vishalt

    vishalt

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    Re: Paladin vs BHP

    Ok lets go:

    Paladin 2007, 2006, 2005
    NPAT (-44.30)(-7.49) (-1.38)
    Dividends (cents) - - -

    0 profit growth, no dividend, driven on speculation

    BHP Billiton 2007, 2006, 2005
    NPAT 15,807.71 14,058.93 7,868.27
    Dividends (cents) 57.09 48.74 36.40

    tronic you said that BHP's price growth is commanding a huge premium... funny seeing that it's ACTUALLY earned money, has an ACTUAL pipeline of projects, and ACTUAL production,

    BHP is commanding a P/E lower than any of its peers, Rio, X, AA. and all its done is gone from around $8.60 to $48 recently, where as in the last 2 years Paladin has gone from 50c to $10.50 and made NO MONEY, and infact as it lost more and ironically its share price increased In November until crashed by half recently, I don't get it who has the premium??


    penny is there any reason why you can't hold both? Paladin, if it moves upwards, does so at a much faster rate than BHP because its cheap and dirty speculators will pour money into it.
     
  6. steven1234

    steven1234

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    Re: Paladin vs BHP

    If your after exposure to Uranium short term Paladin is preferred as BHP has fixed price contracts and last time i looked (early this year) was not producing enough to meet its contractual obligations and had to buy on market to sell on contract. I'm not sure if this remains the position.
     
  7. Nyden

    Nyden G.E. Money Genie

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    Re: Paladin vs BHP

    I held PDN for a while - got out because Uranium just fell way out of favor, & I'm not sure if it's quite back in flavor yet; especially with Rudd in, and his anti-nuclear power views (Hurtful towards Australian uranium sentiment)

    The way I see it - any and all base metals are a bit of a risk at the moment in current volatility, so I'd rather play it safe & pick up a few commodities, rather than just one.

    You can be bullish on any one commodity all you want, but at the end of the day - the only stock you should be holding is the one that grows :2twocents (And that's something PDN has not done for a long while)
     
  8. vishalt

    vishalt

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    Re: Paladin vs BHP

    Too true.

    Paladin is just an explorer, BHP atleast has Uranium production and it will become the world's biggest producer of the commodity once Olympic Dam comes online.
     
  9. Real1ty

    Real1ty

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    Re: Paladin vs BHP

    That is not correct and your view of Paladin seems a bit outdated and harsh.

    Last quarter they produced 274.360 pounds and in 2008 are on target for nameplate production of 2.6 Million pounds, far from an explorer :D

    The demand for Uranium as the years go by is going to be massive and imo it is one of the areas that everyone should have some exposure to.

    The recent pull back in Paladins price was probably related to the recent fall of the spot price of Uranium and the uncertainty in the markets atm, but it is bouncing back well now.

    I believe Paladin is one of the best Uranium producers you could be involved with and i certainly am happy that i am and will continue to be so.
     
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