UK 06:47 Wednesday, 30 September 2026
Breaking news and expert analysis on fast-moving AIM and LSE listed shares
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
The large mining stocks have in general been hammered over the past month or so, but I see that as a great opportunity to buy in cheap. One of my current favourites has to be BHP Billiton (BLT), which has seen more than 15% wiped off of its share price during that period.
Already a member? Sign in
• All premium articles
• Tom Winnifrith’s Bearcast
• Access to all the entire nearly 13 year archive
• ShareProphets Daily Newsletter
Cancel any time
This area of the ShareProphets.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ShareProphets.com. ShareProphets.com does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ShareProphets.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ShareProphets.com and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.
Comments
wildrides
Nice tip Gary
Keep watching the Baltic Dry .
aussiegold
maybe a buy now! not back in September…..
Jimbo
Iron Ore will likely be heading lower in price next year. Why is this? Well for a start there will be shed loads of additional capacity coming onstream in Western Australia at mines owned by both Rio Tinto and BHP Billiton, meaning an already over-supplied market is going to get flooded.
2015 is likely to be the year that any marginal producers of iron ore go out of business – especially in Australia. I also wouldn’t want to be the holder of a major like Fortescue, who are carrying a shed load of debt and need (I think I recall) somewhere in the region of $70 – $80 per tonne to turn a profit. I have the gist of this correct, but you should verify these numbers if you’re seriously considering any kind of iron ore investment in the near future. At some point in 2015 it is highly likely in my opinion that Fortescue will see a rights issue.
The longer term winners out of the present situation are likely to be BHP and Rio Tinto. They have the quality of ore deposits to withstand lower iron ore prices and the scale to produce a high-enough volume at a lower profit per tonne.
Plenty of subjectivity in this post but worth following up some of the points raised if you’re considering an iron ore investment in the near future. Australia’s mining-led economy is looking a mite shaky right now, and one look at the AUD/USD exchange rate will tell you all you need to know about the current outlook…
aussiegold
Now becoming a serious dividend play.
Gary Newman
Never expected to see it this low – although did see further downside and hence why i mentioned spreading buys and taking advantage of that. More of a long term play for when the effects of low iron prices did start to kick in with smaller, higher cost producers. I also think the PE ratio as compared to Rio is very attractive, plus a dividend yield approaching 6 per cent, as Aussiegold has mentioned. I was also basing it back then on an area where it had found good support in the past – I wasn’t alone in thinking it was a good bet at that time as many of the broker reports back then had it as a buy and targets in excess of 2000, many of which have now revised those lower. Hasn’t been a good year in general for resource stocks.