Sharechat Logo

Fortesque Metals

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, dan.stratful@irg.co.nz
**A disclosure statement is available, on request and free of charge.


Disclaimer
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).



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report