BHP - Astonishing result

[FarmerGeorge]

Hey guys, my feel is that the deeper you research BHP the more value you'll see. RIO perhaps the same but I'm not 100% as haven't looked into it as deeply myself.

Just a word of warning, if you follow the rule quoted from a post above:

"PE Calculation is often based on average capitalisation for the year (160+233.9 / 2) "

You will likely come into strife. I've never heard of a PE being calculated this way and am unsure where you would see this.
It's a little dangerous to talk in absolutes (especially on internet forums!) but I would 'always' use capitalisation (or the 'P') from a single point in time.

[soulman]

FarmerGeorge, if China indeed is a bubble and China burst, no PE ratio will work for BHP or RIO. I was looking for shorting tools to short BHP amd RIO but I haven't found one yet. I need a provider that's not CFD. A lending company that lends you the physical shares itself. Anyone out there know? Mark100?

[Toulouse - Luzern]

Thanks Farmer George you are absolutely correct about PE calculation.

My apologies.

I was thinking incorrectly about the ROE calculation
-
Investopedia - "Return on equity may also be calculated by dividing net income by average shareholders' equity. Average shareholders' equity is calculated by adding the shareholders' equity at the beginning of a period to the shareholders' equity at period's end and dividing the result by two."

Hey guys, my feel is that the deeper you research BHP the more value you'll see. RIO perhaps the same but I'm not 100% as haven't looked into it as deeply myself.

Just a word of warning, if you follow the rule quoted from a post above:

"PE Calculation is often based on average capitalisation for the year (160+233.9 / 2) "

You will likely come into strife. I've never heard of a PE being calculated this way and am unsure where you would see this.
It's a little dangerous to talk in absolutes (especially on internet forums!) but I would 'always' use capitalisation (or the 'P') from a single point in time.

[FarmerGeorge]

Soulman - RIO regularly comes up as one of the top 20 most shorted stocks on the ASX so you're not alone in looking to get on that trade! And you're quite right: if China is a bubble which bursts then that 'E' side of the equation will fall away pretty quick.
One way or another though, the world needs the 'stuff' those guys produce - and BHP produces it cheaper than most, and has significant, high quality reserves. RIO, from what I can tell, is making most of its money from just a few major projects (particularly Iron Ore) with a lot of its assets barely contributing, hence I'm a bit more hesitant. My position is that they're both undervalued though (thought I thought that when they were 20% higher than today so...).
T-Luz, yeah no worries there's plenty of acronyms out there to get mixed up with.

[soulman]

Hi FG, although, with my basis, maybe other developed nation like Brazil, India and Russia might pick up the slack.

Every boom has a bust and maybe China is about to burst. I saw BHP in my uni days in 2001 rised from $9 to now $35 due to China and the commodity cycle. It's been 10 years now and just wondering how long to go.

RIO with net debt of about $7.5 bil is ripe for shorting, that's for sure.

[FarmerGeorge]

soulman - you might want to check out Vale, a big Brazilian miner which is right up there. Don't hold it and haven't done any research but it might be worth the time if you're interested in the mining side but don't like the the big aussies

[soulman]

FG, there is only a few things I am looking to do ATM. One is shorting most mining stocks with RIO in the top line, and to buy USD.

Although, at any time, BHP might launch a T/O offer for RIO if RIO gets too cheap.

BHP down another 87 cents today.

[troyvdh]

Am ignorant here... again...but i see the trades of BHP ..but have no idea if the volumes/values going up or down...are of significance....I do appreciate the difference here in NZ...basic premise being SP going up low value ...could be negative..and goin g down ...not so...this may sound so basic...but folk must understand what I mean....I aint Mensa....where do i think this stuff..(Im only a nurse).....

[macduffy]

There's not a lot of interest in BHP on this forum but does anyone else find Marius Kloppers' departure from the post of CEO with a golden handshake of $75m - yes, that's right, $75m! - to be a tad obscene?

http://www.smh.com.au/business/going...221-2eu8u.html

[baller18]

Is BHP on anyones watchlist? Waiting for the tide to turn