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kingkiwi

kingkiwi
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  • BHP Billiton Dividend Stock Analysis [View article]
    The observation about BHP Billiton being a price taker is not wholly correct. It is one of the two price makers in each of copper, metallurgical coal and iron ore. It is positioned to improve its price-taker status in potash but obviously a long, long way from being one the big players in oil and gas.
    Having said that though it is best positioned of any company in uranium if and when nuclear energy becomes the non-carbon generating preference in energy generation.
    The company has trimmed back its exposure to production in countries in which corruption is a major concern; the regulators that thwarted the Rio takeover missed the reality that BHP Billiton's competition is more the proxies for the Chinese, Russian and Brazilian governments than Rio and Anglo American and X-Strata. The point is that the sovereign investment funds set up by these governments operate anywhere with no questions asked of the hosts. As a result BHP Billiton is more focused on mining in contexts that do not threaten its reputation for integrity like Canada, Australia, the USA and Chile.
    The assets for which the prognosis is poor like Aluminium and Nickel are on the block and the new CEO has confirmed that the current assets will be 'sweated' to improve returns and that costs will be carved out in large measure as the sector enters a period of consolidation.
    At current levels I have to respectfully disagree with BBL; it continues to represent good value.
    Feb 27 04:36 AM | 2 Likes Like |Link to Comment
  • More Einhorn: A new bearish thesis, Greenlight has shorted a number of stocks in the iron ore sector, believing the billions miners have spent growing capacity is coming online as global demand growth for steel fades. The big late-year rally in iron ore prices - and stocks like RIO, BHP, VALE, CLF, to name a few - looks to have made a good entry point. [View news story]
    If you are the number one or two producer and at the bottom of the cost curve in a commodities market the one big hole that can upset your company is the outlook for the commodity in the medium (3 to 7 years) and long term (7 to 10 years plus). The outlook for iron ore, copper, oil and gas (and uranium), potash and metallurgical coal on these timelines is excellent. And BHP Billiton's main asset in each case is in a developed setting where the corruption associated with so much mining in the developing world is at a minimum. Apart from their oil and gas assets that are located to benefit from the USA's energy story their deposits are the healthiest known in each commodity. Seems to me there is a lot to like if you are interested in value or am I missing a big minus in the mix?
    Jan 23 03:59 PM | 1 Like Like |Link to Comment
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