Iron ore producer FMG is one of the few resource stocks that’s still trading above its fair value according to Rocky as discussed in our Battery Metals Webinar, a potential concern considering the very real risks of a recession. As the volatility in the bulk commodity ramps up we see no reason to fight the current short-term pullback – just yet. Dividend support might also start to falter with the more diversified BHP and RIO now set to yield more over the next 12-month basis than FMG. The stock looked ok in late May before the market plunged but applying the simple “KISS” rule we prefer other Australian miners with BHP front and centre for some iron ore exposure.
MM prefers BHP to FMG at current levels
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