Tag: ASX:FMG

Since posting a high of $5.03 on May 15th, shares of FMG have dropped almost 10%, reaching a low of $4.53 in early trade today.

Much of the weakness has been focused on the tepid demand for Iron Ore from China, as well as, the widening spread between the higher grade ore and the lower grades of ore.

However, as profit margins contract for Chinese steel mills, we will likely see this spread contract to the benefit of low grade producers like FMG.

FMG is the 3rd largest Iron Ore producer in the world and, as a low cost producer,  is still profitable even in the lower grade market.

The company is scheduled to pay a 25 cent dividend on September 1st, which is 5.5% of the current share price on a stand alone basis.

Fortescue

Pilbara Ports Authority released its April shipping figures for its ports in the Pilbara region, which delivered a total of 59.1 million tons for the month, a seven per cent year-over-year increase.

Iron ore exports from Port Hedland remained consistent, up 1 per cent from April 2017 figures to 42.6 million tons.

These better-than-expected export numbers helped lift FMG over 4% for the week to reach a 4-month high of $4.95.

FMG is part of our ASX Top 50 portfolio and we see the next near-term target in the $5.50 area.

Fortescue Metals Group

Shares of FMG have posted as 6-week high at $4.75 as the Iron Ore miner reaffirmed FY18 shipments of 170 million metric tons.

It’s worth noting the Q4 is typically FMG’s strongest quarter for shipments.

This should continue this year as the company broadens its customer base to include low-grade ore users like India.

We still prefer the long side of FMG and have a medium-term price target of $5.35.

Fortescue Metals Group

Shares of FMG posted their first close above $4.50 since March 27th.

This time last year the share price was close to $6.50, which is about a 30% drop over the last 12 months

We forecast earnings of about 50 cents per share in 2018, a decrease of 34% on the previous 12 months. This puts the current share price at a P/E ratio of 7.6 based on 2018 earnings.

The company currently has a market cap of just over $13 billion and $5.5 billion in debt. The forecast for 2018  EBITDA  is around $6 billion, depending on stable Iron Ore prices.

These are just a sample of the key metrics which suggest FMG shares are undervalued and will offer investors good upside price performance over the medium-term.

Fortescue Metals Group

Shares of FMG are firming back over $4.80 in early trade as Spot Iron Ore prices rose for the second consecutive day to reach $72.00.

Analysts have pointed to the end of China’s winter curbs on metal production as supporting demand for all grades of Iron Ore over the near-term.

Internal momentum indicators on the daily charts are improving and we see the next resistance level at $5.25 and support at $4.60.

FMG is part of our Top 50 Model portfolio and we suggest that investors can buy the stock at current levels for a move back into the $5.40 area over the medium-term.

Fortescue Metals group

Despite the 3% drop in Iron Ore prices overnight, shares of FMG have firmed to $4.83 in early trade.

Comments from commodity traders suggest that the recent dip in Iron Ore prices may be more of a seasonal cycle than a fundamental shift to lower demand.

The technical outlook has improved this week as the price action remains above the $4.60 consolidation area from mid-December, and internal momentum indicators are pointing higher.

FMG is part of our Top 50 Model portfolio and we suggest that investors can buy the stock at current levels for a move back into the $5.40 area over the medium-term.

Fortescue Metals

Shares of FMG are flat after the company announced a refinancing package which will lower their annual borrowing costs by more than US$130 million per year.

The package is in the form of US$ 500 million of senior unsecured notes at 5.125%.

This is a significant improvement to FMG’s capital structure, reflects confidence from senior management,  and should give the share price a boost over the near-term.

FMG is part of our ASX Top 50 model portfolio and our ALGO engine triggered a buy signal at $4.70 on May 15th.

We prefer the long side of FMG from $5.00 and suggest that inventors add the stock to their portfolio holdings.

Fortescue Metals Group

Shares of Fortescue Metals are trading over 3% higher in early trade after the release of their Quarterly production results.

The report showed that Iron Ore shipments were down 4% to 40.5 million tons and the cost of production fell 4% to US $12.05 per ton, which is a record low overhead cost for the company.

With the mining and processing parts of the report as expected, the stock is firming on the lower cost of production, as well as the prospects that production costs could continue to decline.

FMG is part of our Top 50 Model Portfolio and our ALGO engine triggered a buy signal at $4.70 on May 15th.

Daily charts are showing stiff resistance in the $5.60 area. We suggest that investors who are long FMG work a sell-stop order at $4.95.

Fortesque Metals Group

The steady decline in Iron Ore prices over the past two weeks turned into a rout as concerns grow about new supply combined with fears that Chinese steel production may have peaked for the year.

The Steel Index benchmark price for Northern China 62% Iron Ore sank by 7.4% to trade at $63.00 per ton on Thursday, an 11-week low. On a Year-to-date basis, Iron Ore has dropped over 20%.

On September 11th, we posted a sell signal on FMG at $6.05, with an initial target of $5.40. FMG shares closed at $5.12 on Friday and now target the July 24th low of $4.88.

Fortesque Metals Group