Our Algo Engine generated a buy signal in BHP following the recent “higher low” chart formation.
We see value in the $30 – $31 range and suggest accumulating BHP with a view towards selling covered call options to enhance the overall investment return.–
BHP
Our Algo Engine generated a buy signal in BHP and we highlight in the chart below our preferred accumulation price range.
Escalating trade tariffs and concerns regarding a China slowdown are the obvious reasons for short-term price weakness in BHP’s share price.
We expect to see some sort of resolution in the trade disputes by the New Year, although pressure will likely remain ahead of the US mid-term elections in November.
BHP
In a move to diversify its asset base, mining giant BHP has agreed to pay around $50 million for a 6.1% stake in SolGold, which operates a copper-gold project in the mineral-rich Cascacbel region of Ecuador.
Interestingly, one of BHP’s partners in the SolGold project will be Newcrest mining, which owns 14.5% of the mine and is the majority operator.
We take notice of the foresight of this purchase, along with other asset acquisitions by domestic mining names against the backdrop of falling raw materials and mineral prices.
We see solid chart support for BHP in the $30.60 area.
BHP
Shares of BHP have found support just above $32.00 after Wednesday’s mixed full year profit report.
While total revenue rose 20% to US43 billion, cost will likely rise as the company lowered its productivity savings target for 2019.
Still, we believe stable Iron Ore prices and strong energy supports BHP. Capital returns to underpin downside risks.In BHP.
BHP goes ex-dividend for 85.6 cents on September 6th.
BHP
Shares of BHP have traded with a slight downward bias since announcing over $10 billion in asset sales last week.
Some of the investor uncertainty focuses on what the mining giant will do with the proceeds of the sales.
The company has signalled its intention to return all net proceeds to shareholders but has not outlined the timing or manner in which this will happen.
Technically, we see solid price support in the $32.50 area.
Factoring in the expanded share buyback scheme, an increased dividend and a special dividend could lift the share price back into the $37.00 area.
BHP
Shares of BHP have jumped over 2% to $34.50 in early trade following the announcement of the sale of their onshore shale assets in the USA.
British Oil giant BP will pay USD 10.5 billion for the bulk of the energy assets, while Texas-based Merit Energy will buy the other $300 million worth of assets.
The company has pledged that the USD 10.8 billion from the sales will be returned to shareholders, but hasn’t been clear about how and when.
BHP has rallied from the April “higher low” formation and is now trading at the upper range of our price target.
Our advice to blog readers in April was to buy BHP and se ll the $35.00 strike call options to enhance the cash flow.
BHP
Our ALGO engine triggered a buy signal for BHP on March 9th at $28.32.
A recent broker note focused on the mining giant’s increased production of Iron Ore, Coal and Crude Oil as the basis for upgrading their 12-month price target to $37.00.
As mentioned in a previous Blog, we believe these upgrades will also lead to an increase of their dividend to the $1.40 range.
With a potential “double top” resistance in the $35.50 area, we would consider a buy/write strategy at these levels.
BHP goes ex-dividend for 60 cents on September 7th.
BHP
In FY18, BHP will produce US$46 billion in revenue and generate EBIT of US$16 billion, which will support a dividend yield of 5%+
If we look out into FY19 and assume moderate growth achieved through higher energy prices and disciplined cost control, it’s likely BHP will increase the dividend to US$1.40. This will then place the stock on a forward yield of 5.4%.
BHP goes ex-div US$0.60 on the 7th of September. Adding a $34.01 (Euro) call option into October, boosts the cash flow by a further $1.25 per share.
1Q18 revenue for WPL was slightly softer than expected at US$1.169 billion.
Expansion of the WA-based LNG operations will provide longer-term growth, especially given the strength of fundamentals supporting LNG.
Post the acquisition of Exxon’s interest in Scarborough, WPL now holds a 75% stake with partner BHP holding 25%. We expect BHP to be a natural seller of its remaining interest.
Woodside Petroleum
Our ALGO engine triggered a buy signal for BHP into the ASX close at $28.35.
The “higher low” price structure is referenced to the $26.90 low posted on December 8th.
BHP’s share price has dropped 10% over the last 8 trading sessions as concerns about the company’s proposed sale of shale assets has somewhat clouded their future earnings outlook.
During a webcast on Friday, CFO Peter Beaven reminded investors that BHP has a policy of paying out at least 50% of profits in dividends and increased that to 72% in the December half.
With respect to the shale assets, one analyst report suggested that for every $1 billion of proceeds from the sale, BHP can return 24 cents per share.
Technically, we see good price support at the $27.85 level and an area of initial resistance at $30.15.
BHP
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