BHP delivered a solid result earlier in the month covered Here which demonstrated the company now enjoys more over 50% of its earnings from copper – this commodities mix is the reason we continue to prefer BHP over RIO. The overseas buying continued overnight with BHP trading ~$57.60 in the US, even as the $A punched through 71c as appetite for commodity based currencies increased. The “Big Australian” appears to be the go-to stock for overseas investors wanting/needing to increase their mining exposure plus as we alluded to earlier the higher it rises the more ETFs need to increase their exposure when they rebalance – it’s like a self-fulfilling feeding frenzy – similar to CBA last year.
- We are targeting the $58-60 area for BHP in the short term – MM owns BHP in its Active Growth Portfolio and Active Income Portfolio.
Hence, we may move back our original position size into such a move – as the prevailing weight has increased.
MM is long and bullish BHP ~$56
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