BHP - Astonishing result

[BlackPeter]

Goldman Sachs reckon Aussie miners are still overpriced.

http://www.smh.com.au/business/marke...19-gm8tab.html

Anyone think otherwise?

Haven't looked at this one (BHP) for some time now .. but the trend chart looks shocking ... falling knife springing to mind. So yes, Goldman might be still right (until the trend changes, of course).

[macduffy]

Haven't looked at this one (BHP) for some time now .. but the trend chart looks shocking ... falling knife springing to mind. So yes, Goldman might be still right (until the trend changes, of course).

That's pretty much my thoughts, too, Peter. BHP has been a great medium term investment for me -several times - in the past 40 odd years. Looking forward to another opportunity when the dust settles!

[Beagle]

Haven't looked at this one (BHP) for some time now .. but the trend chart looks shocking ... falling knife springing to mind. So yes, Goldman might be still right (until the trend changes, of course).

That's pretty much my thoughts, too, Peter. BHP has been a great medium term investment for me -several times - in the past 40 odd years. Looking forward to another opportunity when the dust settles!

I'm with you guys on this one. Waiting until a new uptrend is confirmed. I think if BHP are smart they'll be able to pick up some incredibly cheap assets from the junior miners in the next few years.

[Daytr]

I think it depends on their costs and that their costs including debt have remained in Aussie dollars.
So many of the banks were recommending USD denominated debt and many got sucked in and are paying for it now.

[trader_jackson]

I would be careful with BHP (or Rio)... I know yesterday Ord Minnett slashed its 12 month target from $18 to $13, with a lighten recommendation. Balance sheet is OK, but except the dividend to be dramatically cut (Ord Minnett expecting it to be halved)

In my view, it is all about the cash flows for many of these mining companies right now, from Bathurst to BHP. As BHP is expected to be free cash flow positive, I think long term should be ok, but tread with alot of care.

Disclosure: Not holding (but a year ago almost exactly thought it was 'good' at $29, lucky I didn't buy!)

[Daytr]

These guys that defend dividends at all costs are reckless at best and are risking shareholder money and in some cases the very viability off the company.
How many times have you seen dividends paid only to see a CR months later at a much lower SP for instance.
Share buybacks the same. In the US how much stock was bought back at the top of the market?

[macduffy]

Agree, Daytr.

BHP havn't admitted it yet but the odds are increasing that they will reduce their dividend, particularly as they have recently stated that they are "committed to protecting their balance sheet".

[macduffy]

Too early for me but Credit Suisse rates BHP an Outperform.

"Credit Suisse rates BHP as Outperform (1) - December quarter production was lower than the preceding quarter. Credit Suisse adjusts volumes for the FY16 production guidance, which is unchanged other than for the exclusion of Samarco iron ore, which remains suspended.
Credit Suisse retains an Outperform rating and $20.00 target.
Target price is $20.00 Current Price is $14.21 Difference: $5.79 If BHP meets the Credit Suisse target it will return approximately 41% (excluding dividends, fees and charges). Current consensus price target is $20.16, suggesting upside of 41.9%(ex-dividends)The company's fiscal year ends in June.
Forecast for FY16:
Credit Suisse forecasts a full year FY16 dividend of 83.08 cents and EPS of 44.96 cents . At the last closing share price the estimated dividend yield is 5.85%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.61. How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 35.9, implying annual growth of N/A.Current consensus DPS estimate is 128.6, implying a prospective dividend yield of 9.0%.Current consensus EPS estimate suggests the PER is 39.6.Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 83.08 cents and EPS of 59.57 cents . At the last closing share price the estimated dividend yield is 5.85%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.85. How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 68.1, implying annual growth of 89.7%.Current consensus DPS estimate is 126.2, implying a prospective dividend yield of 8.9%.Current consensus EPS estimate suggests the PER is 20.9."

[Beagle]

Too early for me but Credit Suisse rates BHP an Outperform.

"Credit Suisse rates BHP as Outperform (1) - December quarter production was lower than the preceding quarter. Credit Suisse adjusts volumes for the FY16 production guidance, which is unchanged other than for the exclusion of Samarco iron ore, which remains suspended.
Credit Suisse retains an Outperform rating and $20.00 target.
Target price is $20.00 Current Price is $14.21 Difference: $5.79 If BHP meets the Credit Suisse target it will return approximately 41% (excluding dividends, fees and charges). Current consensus price target is $20.16, suggesting upside of 41.9%(ex-dividends)The company's fiscal year ends in June.
Forecast for FY16:
Credit Suisse forecasts a full year FY16 dividend of 83.08 cents and EPS of 44.96 cents . At the last closing share price the estimated dividend yield is 5.85%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.61. How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 35.9, implying annual growth of N/A.Current consensus DPS estimate is 128.6, implying a prospective dividend yield of 9.0%.Current consensus EPS estimate suggests the PER is 39.6.Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 83.08 cents and EPS of 59.57 cents . At the last closing share price the estimated dividend yield is 5.85%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.85. How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 68.1, implying annual growth of 89.7%.Current consensus DPS estimate is 126.2, implying a prospective dividend yield of 8.9%.Current consensus EPS estimate suggests the PER is 20.9."

Thanks. Like many in these sort of circumstances I prefer to simply follow the technicals and wait till the 100 day MA is clearly broken through back to the upside...whenever that might be ? I doubt with the extreme velocity of the price drops in so many commodities that any analyst can reliably predict future earnings at this stage.

[winner69]

Motley Fool email spam stuff had this tweet included in it

@pgker: Barclays estimate the ''upside'' share price estimate for BHP over the next year is $14.70.The downside: $6.30


Did the world ever find out how many died and what was the degree of pollution/damage caused when that dam collapsed in Brazil.

One reason not to buy