I actually got in and out of FMG last month at $2.43 and $2.85 but thought that I should get it while the getting is good. At $2.13 is this a good buy though? Thru just announced they found 300Mton of new ore in an easy to access (cheap) area on one of their existing mine sites. Australian iron ore is also increasing it's market share in China. I now this doesn't mean much if your producing at a loss but with low oil prices, low australian dollar reducing wage and capital works costs as well as WA royalty rebates (not yet offered to the bigger miners but could easily happen if things get too tricky) are things looking up for FMG? They certainly have some debt problems but if they can be somewhat profitable I'm sure they will be able to refinance. Anyhow, it's likely a short to mid term play waiting for a share pruce rise on news that the factors above are making them profitable or a secular rise in iron ore process, hopefully before the 2019 debt becomes an issue. I'd really like people's thoughts on FMG, is $2.13 a bargain if the dollar and oil can ease their pain?
Anyone thinking that at $2 with the new debt restructuring that FMG is worth a shot? Lower aud and oil prices must be giving them some serious relief assuming we're close to an iron ore bottom. I can't make up my mind. I'm thinking of doubling down on PEN instead. If I'm honest though the money is more likely to end up going towards my new bike.
Honestly, I just don't see the iron ore bottom yet. And when we do see it, I can't see a anything but a slow-flat recovery. I might be wrong.
Jan15 news but can give some thoughts on FMG....... http://www.moneymorning.com.au/20150127/fortescue-metals-group-share-price-fell-today-13.html
Bought this today at 1.95 for a spec buy. TCG (3rd largest Shareholder) increased its holding by 1% to 7% now with ave $2.14. maybe new announcements come to light ..... finger crossed
With such a debt $8B .. will they bite it? Well...anyway..hoping it will eventuate.......................
The debt is a real sword of Damocles over FMG's head. If things stay on an even keel, even if iron drops a little more in the next year, then they probably survive and re-structure the debt as they move forward. Problem is though that if there's any sort of serious problem anywhere along the chain from an internal company problem right the way the through to a systemic Iron consumption problem like the Chinese economy falling over then the debt starts to look crippling. If there was a crash in iron demand then companies like BHP survive but with the debt FMG will be the first one to have the plug pulled if people are getting out. Take over would be nice, glad I jumped out whether I did though.
Yes, agreed.. FMG (and his sibling Santos) is in debt laden now. RIO SP will be hammered massively too if IO keeps falling down (considering the large part of their profit comes from IO). The only one appeal to me is BHP which more diverse on their portfolio. On a serious note, the whole IO debacle is so irony..I really meant it...China got a good deal on IO (I would assume they get more discounts for forward payments) then make the steel as the finished good. The steel resells back to Aussies at a higher price (note AUD is in a freefall). Arent we the sheep here?
