By Dan Stratful
Friday 17th February 2012
|Text too small?|
Iron ore miner Fortesque Metals (ASX: FMG) has been the subject of takeover rumors recently after a mystery buyer bought a 2.9% stake last week. The buyer is thought to be Canada's Teck Resources or possibly Xstrata, while the planned merger between Xstrata and Glencore is adding further speculation of M&A activity.
The market is speculating that whoever bought the stake in FMG doesn’t have iron ore exposure and is gaining that by purchasing a stake in FMG.
The M&A speculation comes as FMG this week reported its first half results for the half year ending 31 December 2011 (1H). 1H total shipments were 27.1 million tonnes of ore compared to 20.9 million tonnes in the prior 1H. The interim result was a record, and interim net profit increased 155% to US$801 million, on revenue growth of 33%.
FMG carries a lot of debt on its balance sheet, and uses significantly higher levels of gearing than BHP and RIO, but it is growing so fast, its high debt levels can be justified.
FMG is well on its way to achieving its first stage expansion target of 55 million tones per annum (mtpa) while rapidly building towards a higher goal of 155mtpa.
As the forth largest iron ore miner in the world, FMG is ideally placed to supply SE Asia’s growing demand for iron ore, a key ingredient in the steel making process.
Status: GROWTH BUY
FMG’s shares today traded at $5.34
For portfolio, sharemarket and fixed income enquires contact:
Dan Stratful at Investment Research Group (IRG)
Authorised Financial Adviser (AFA)
0800 437 8489, 09 304 0232, email@example.com
**A disclosure statement is available, on request and free of charge.
In accordance with the Financial Advisers Act 2008 (“the Act”) Sharechat is “Class Advice” and any advice or recommendations contained on this webpage is not “Personalised Advice” as defined by the Act. This means Sharechat does not take into account an investor’s particular financial position, financial needs, financial goals, risk profile or asset allocation. Investor’s who require “Personalised Advice” should contact an Authorised Financial Adviser (AFA).
DISCLAIMER: To the extent that any of the content above constitutes advice, it is general advice that has been prepared without reference to investor’s objectives, financial situation or needs. Before acting on any advice, investors should consider the appropriateness of the advice and IRG recommend that investors should obtain appropriate financial, legal and taxation advice before making any financial investment decision. The report is based on information compiled from public information and private research. IRG have completed the report on a best endeavours basis and do not accept any liability of loss or damage. IRG suggest that clients use this as part of a decision making process and check key data before making any investment decisions.
Employees may have an interest in the securities discussed in this report.
No comments yet
NZ dollar falls on news RBNZ is looking at "unconventional" policy
Wrightson capital return gets shareholder approval
Morrison & Co eyes asset sales from first PIP Fund
Improved transmission pricing may save $2.7 bln - Electricity Authority
Precision Foundry receivers say no money for unsecured creditors
23rd July 2019 Morning Report
NZ dollar tad weaker, ECB, Federal Reserve in focus
MARKET CLOSE: NZ shares outperform Asia as exporters gain; Sky leads market higher
Significant shortfall for subbies in Ebert receivership
Transpower sees no risk to credit metrics from incentive change