Having done some “trimming” recently with BHP & FMG at their highs , is it a reasonable to buy back in ( at a 20% or so discount from my selling price) , now they are about to go ex dividend? 

Hi Paul Having done some “trimming” recently with BHP & FMG at their highs , is it a reasonable to buy back in ( at a 20% or so discount from my selling price) , now they are about to go ex dividend?

A: Well done on the trimming! Although the iron ore price has fallen quite substantially, stronger global growth should still be supportive for commodities generally. BHP has pulled back by almost 25% – partly dividend related, partly iron ore/copper price related, partly a function of the cancellation of its listing in London and arbitrage selling of the Australian listed shares.

My sense is that there is a bit of value in the major miners. According to FN Arena, the broker targets are now: BHP $47.98 (about 14% upside), Rio $133.43 (22.8% upside) and Fortescue $21.61 (5.9% upside, but when it trades ex-dividend, this will increase).

I prefer BHP because of the exposure is more diversified.


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