BHP Billiton Share Discussion Threads

[loganair] 30/7/2017 10:16

By Alan Oscroft:

Around six years ago, FTSE 100 mining stocks were booming -- and BHP Billiton (LSE: BLT) shares reached 2,475p in April 2011.

But Chinese demand was slowing, a worldwide oversupply pushed metals and minerals prices down, and we've had a sector slump -- and today BHP shares trade for just 1,358p, having fallen 45%. We've had some decent dividends to offset that, but it's still a poor overall performance.

Is it time to buy for recovery? I think it is.

Some commentators will tell you they can work out when to get into and out of the mining cycle -- but I certainly can't do it, and I reckon it's a mug's game to try timing it. So I just go on fundamentals and buy shares for the long term when they look cheap -- and I'm attracted to BHP's right now.

Iron ore reached a low at the end of 2015, but it's stabilised and even regained a little since then, while copper has been on the way back up over the same timescale, and the worst of the commodities weakness appears to be over.

A decent year:

In a full-year production update on 19 July, BHP told us it had met most of its production guidance, though copper output was down 16% -- largely due to a combination of industrial action at its Escondida facility, and a power outage and unplanned maintenance at Olympic Dam, though output is expected to pick up by 7% in the current financial year.

If the mining sector is looking good value now, why BHP Billiton? Well, I'm drawn to its diversification, meaning the company is less of a hostage to prices and demand of any individual commodity.

BHP Billiton shares have been recovering steadily since early 2016, and with forecast P/E multiples of 13-14 and dividend yields of around 5% predicted, I think the point of maximum pessimism is past and the shares are good value.

Full-year results are due on 22 August.

[action] 27/7/2017 12:17

1400 is comming on trading update...

[loganair] 26/7/2017 20:58

As a result of the update and guidance for FY 2018 the analysts at UBS reportedly rate BHP shares as a “buy” with a share price target of $28.

The analysts are expecting full year earnings per share of $1.80, which means BHP trades on 13x earnings on its current valuation.

Over FY 2018 UBS is forecasting earnings per share to be flat at $1.83, which reflects BHP’s production guidance for the year ahead, although the potential for wild swings in commodity prices means profit forecasts can be unreliable.

BHP also still has to pick up the bill for a US$250 million compensation program it has put in place for victims of the Samarco dam disaster in Brazil, with some US$47.5 billion in public civil claims relating to the failure still to be negotiated and settled.

Over the last five years, BHP shares are down 21% and based on analysts’ forecasts it will offer a dividend yield of 4% over FY 2018.

[action] 20/7/2017 13:13

So lo g it drives share price to 1400 plus near year high I will be happy

[smicker] 20/7/2017 00:50

Somebodys not happy

[loganair] 19/7/2017 19:19

Encouraging outlook by Peter Stephens:

Providing an operational review for its full year was resources company BHP Billiton. It was able to meet its production guidance in areas such as petroleum and iron ore. However, copper production was lower than the previous year due in part to industrial action at one of its key assets, as well as unplanned maintenance and power outages elsewhere. However, since the company is relatively diversified, it was able to deliver a strong performance despite the challenges it faced.

In fact, the company’s diversification is a major ally for investors. While there are enticing investment opportunities available in the mining and oil & gas sectors at the present time, BHP Billiton offers exposure to a range of commodities which span both industries. Therefore, even if the prices of multiple commodities fall, it may be able to outperform industry rivals on a group basis. This could mean lower risks, which may create more consistent and sustainable shareholder returns.

With BHP Billiton trading on a price-to-earnings (P/E) ratio of 13.5, it appears to offer upside potential from a rerating. Certainly, the resources sector is a relatively volatile industry in which to invest. However, with a wide margin of safety and diverse asset base, BHP Billiton appears to be a sound buy.

[loganair] 19/7/2017 19:16

SP Angel - Setting production records in iron ore and in some of the coal operations is testament to management efficiency and control within an existing business, however, we find it interesting that the only mining major new mining project development specifically identified as a major capital project is BHP Billiton’s Jansen potash development and that the primary focus of exploration is on discovering new copper orebodies.

[action] 19/7/2017 15:04

Trading update

[loganair] 17/7/2017 20:15

A restart of BHP's Samarco asset in Brazil this year is unlikely, says Investec, due to permitting uncertainties and capital restructuring requirements.

Investec sees a 7-10% reduction in forecast earnings over full-year 2018-2019 due to the weakening oil price. As a result, its target price slips by 6% to 1,395p.

[action] 12/7/2017 14:07

Will be selling above 13.5o++

[rhintintin] 11/7/2017 16:19

mid term buy off a double bottom.

[anley] 11/7/2017 11:35

and don't forget at 1600p Elliott will have sold out his 4% stake.........

[action] 10/7/2017 14:07

Thanks Loganair

[loganair] 10/7/2017 12:19

Deutsche Bank thinks BHP Billiton likely to see a significant re-rating under new chairman, revamped strategy.


As a result, the German bank has upgraded its rating for the FTSE 100-listed firm to ‘buy’ from ‘hold’ with an increased target price of 1,600p, up from 1,400p previously.

Deutsche Bank thinks shares in BHP Billiton plc (LON:BLT) are likely to see a significant re-rating under the global miner’s new chairman and revamped strategy.

In a note to clients, Deutsche’s analysts pointed out that “BHP has underperformed major global mining peers over the past 3 years”.

They said: “A strategy update in May outlining a ‘suite of opportunities’ to grow value by 50% lacked detail and targets in our view.”

But, the analysts added: “We have analysed these opportunities and see productivity and automation (US$12b in value) and high returning growth (US$8b) as the most compelling.”

They said: “We would like to see a revamped strategy under new Chairman Ken MacKenzie focusing on returns, with targets, which we outline in this report.

“We think a sharper focus on returns would create significant value for shareholders.”

MacKenzie, who was considered one of Australia's most successful chief executives in his 10 years running Amcor Ltd, will succeed current BHP chairman, Jac Nasser from September 1.

[action] 10/7/2017 10:56

Not quite quit here ....Any one has any views for this stock pls?

[zorija] 29/6/2017 14:14

even 'quiet' here

[action] 29/6/2017 14:03

Very quote here

[loganair] 23/6/2017 09:47

The BHP Billiton Limited (ASX: BHP) share price was dumped 3% on Wednesday, continuing its recent falls.

In just one month, more than $10 billion has been wiped from BHP’s market value.

Why?

At the end of April, ‘The Big Australian’ released its operational report which showed a fall-off in production in its petroleum and copper businesses. However, that likely doesn’t explain the company’s recent falls.

Looking further afield, it’s easy to see that the issues crippling its share price most likely stem from falling commodity prices.

In May, here’s how the prices of BHP’s key commodities moved:

Iron ore – down 13%
Copper – down 1.5%
WTI Crude – down 5%
Thermal Coal – down 11%

Oil, which accounts for a huge chunk of BHP’s business, has continued to fall since May. It’s fallen from $US48.36 to just $US42.62 per barrel, according to Bloomberg. In other words, it’s down a further 12%.

[loganair] 16/6/2017 09:42

BHP Billiton names packaging boss Ken MacKenzie to tricky job as new chairman

MacKenzie, who was considered one of Australia's most successful chief executives in his 10 years running Amcor Ltd, will succeed current BHP chairman, Jac Nasser from September 1.

In a statement, Elliott said it supported the appointment of MacKenzie as a "constructive step in bringing much needed change to the direction of BHP."

[loganair] 16/6/2017 09:39

BHP Billiton's new chairman should "review" and "upgrade" the mining group's board of directors, activist investor Elliott Management has demanded, citing the backing of several other major shareholders.

With chairman Jac Nasser retiring and a new chairman expected to be announced imminently, the activist investor, which blamed management for "destroying tens of billions of dollars in shareholder wealth" from its expansion into the US petroleum business and share buybacks "at inflated prices", said the new appointee should "reconstitute and refresh the BHP board of directors".

"BHP has an entrenched board, with long-tenured directors having approved the disastrous acquisitions and poorly timed share buybacks that are at the root of much of today's underperformance," the New York hedge fund said in an open letter. "A significant upgrade in directors is needed."

Although chief executive Andrew Mackenzie, who held talks with Elliott last month, has stressed his confidence in boosting the value of the company by up to 50% and near-doubling the return on capital through cutting costs and carefully managing assets, Elliott remains unsatisfied and has continued to keep up the pressure.

The letter cited soundbites from other major shareholders in recent weeks, including Australia's AMP Capital calling for an "independent assessment" on the decision unify BHP's legacy dual-listed company structure, Aberdeen Asset Management calling for a "refreshing of the board", and Tribeca for the new chairman to "reset the culture to one that covets capital efficiency and earnings per share growth".

Elliott wants the new appointment to have the mandate to initiate an independent review of the petroleum business and explore a potential sale of the US oil and gas operations; "unlock" BHP's $10bn franking credit balance through a unification of the dual-listing while maintaining BHP's Australian domicile, listing and headquarters; and develop a new capital return plan that prioritises shareholder returns.