28/09/2023 09:15

Fortescue Metals Group (FMG) $20.37

FMG’s revenue in FY23 were 90.8% from iron ore, making this by far the purer bulk commodity play, but we do prefer BHP’s increasing copper exposure over the coming years. We’re also concerned around governance and their unqualified push into green energy – it’s hard to quantify the potential impact here when the company steps back from  previously stated guidance on future expenditure. While FMG is definitely an option for income with the stock estimated to yield over 9% in the next 12 months, it is unlikely to show up in our portfolios.

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05/09/2023 09:06

Fortescue Metals Group (FMG) $20.20

FMG rallied +4% from its opening print yesterday morning after trading ex-dividend $1 fully franked, an impressive performance for a stock that’s struggled over recent weeks due to ructions within senior management with 3 high ranking individuals including its CEO and CFO leaving in the past week and no reasons given – it feels all a touch too hard at the moment.

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28/08/2023 16:53

Fortescue Metals (FMG) $19.87

FMG -5.06%: A fairly tough session for Fortescue today as they announced a mixed FY23 result and surprise departure of CEO Fiona Hick after only 6 months in the job. Underlying revenue of US$16.9bn was smack inline with expectations however profitability was a slight miss, with underlying net profit after tax (NPAT) of US$5.5bn vs consensus US$5.7bn. The dividend of $1.00 was also below the $1.05 expected. Higher costs to blame for the miss at the profit line while there was plenty of focus around the departure of the CEO, the 10th Senior exec departure in the past 3-years. The current COO Dino Otranto appointed as new CEO. Operationally, they updated their forecasts for Iron Bridge life of mine C1 cost to US$45/wmt versus expectations of sub US$40/wmt while they also wrote the asset down by $726m post tax, partly due to higher discount rates. A toug

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15/08/2023 09:08

Fortescue Metals Group (FMG) $20.62

Iron ore producer FMG has held up well through 2023 but its reversed sharply after spiking up towards $24 when China fired its first stimulus barrel back in July. A forecast ~7.% fully franked yield over the next 12 months is very supportive but moving forward this will clearly be dictated by the strength of the Chinese economy.

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27/07/2023 17:06

Fortescue (FMG) $22.92

FMG -3.41%: the iron ore miner was out with 4Q production numbers today which were broadly in line. They shipped 48.9mt in the quarter, down marginally on last year however Fortescue hit the upper end of guidance in this respect for the full year with 192mt of iron ore shipped.

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29/05/2023 09:06

Chart of the Week

Iron ore has been flirting with the $US100/MT area over recent weeks with the next 10-20% move highly likely to be determined by future economic activity in China i.e. so far the world’s 2nd largest economy has disappointed as it reopens from unprecedented COVID lockdowns.

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26/05/2023 08:53

Fortescue Metals Group (FMG) $19.00

FMG has now corrected over -18% from its February high, pretty much in line with iron ore which has fallen over 20% during the same period. However, we believe the price of iron ore is much closer to a low than its recent swing high suggesting it’s time to consider starting to accumulate FMG.

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27/04/2023 09:37

Fortescue Metals Group (FMG) $20.66

FMG bounced 60c, or 3%, from its intra-day low yesterday, suggesting plenty of buying into pullbacks of bulk commodity names. Wednesday’s session saw iron ore fall below $US100 per tonne for the first time since December as concerns rise that China’s demand is slowing.

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24/02/2023 09:48

Fortescue Metals (FMG) $22.83

FMG is becoming a trickier proposition given its focus on green hydrogen production, and importantly, how much capital will be allocated towards Fortescue Future Industries. While we support companies pushing the boundaries into new areas for environmental benefit, it seems to us that Andrew Forrest’s priorities over the coming years may be focused more heavily towards ‘leaving his mark’ rather than producing strong shareholder returns from Fortescue’s Iron Ore business. While these are not mutually exclusive, it is a dynamic that we should be thinking about, particularly given our current neutrality towards the Iron Ore price.  

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20/12/2022 09:37

Fortescue Metals Group (FMG) $20.03

The miners and in particular iron ore names are directly correlated to the Chinese economy more than by tariffs but we felt they warranted a mention today in the context of today’s report. The iron ore stocks are not our favourite place to be invested medium term but into 2023 they look cheap while still paying an excellent yield hence into weakness they are on our radar, especially if/when China fires its next salvos of stimulus.

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