That's hard to say.
If I were a technical trader I would suggest that it wouldn't fall through being a major $16 major support level.
But I am a fundamental value investor and in my opinion the current price is already below it's intrinsic value, hence I would consider FMG a buy at this level.
My call is based on the following factors:
- Strong cash flow generation.
- FMG is also one of the lowest cost producers.
- Aud under pressure and coupled with impact from Covid further room to fall. Favourable conditions for Australian exporters. So while the iron ore price may be coming off a bit we still have a cheaper Aud as an offset. Full disclosure, I am more bullish on the AUD longer term due to favorable industries and demographics.
- FMG is innovating into new areas of green hydrogen production and clean energy generation. Creates a point of difference to FMG vs RIO and BHP. Fully disclosure, I also own a sizeable stake in RIO. The more I read about the prospects of Green Hydrogen the more bullish I become.
- Steel should be in need with the favorable economic backdrop with governments stimulating like it's going out of business to stave off recessions.
- Steel in long term up cycle with expected demand to de-carbonise the planet.
- Very extended valuations in areas outside the commodity producer space. So some amount of valuation catch-up is possible. I also like the prospects investing in real assets rather than financial assets.
- Commodities tend to do well or better in inflationary environments. It can in some ways be seen as a hedge on inflation.
- Additionally, FMG appears to be going through a bit of a wash out at the moment which means you may be getting bargain prices. Be greedy when others are fearful, etc.
- I am trying to build out more of a income portfolio. My current positions are mostly positioned around growth and so FMG is providing me much needed diversification.
Sorry to harp on. I just thought it would be better give you a more complete answer because investing is a complicated beast.
Please don't consider this investment advice. I am not a qualified investor advisor or anything. Do your own research, etc etc...
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$18.40 |
Change
0.430(2.39%) |
Mkt cap ! $56.66B |
Open | High | Low | Value | Volume |
$18.11 | $18.49 | $18.10 | $121.7M | 6.649M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
10 | 8068 | $18.40 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$18.41 | 20593 | 32 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
18 | 16742 | 18.460 |
13 | 11043 | 18.450 |
10 | 9960 | 18.440 |
10 | 7841 | 18.430 |
13 | 12491 | 18.420 |
Price($) | Vol. | No. |
---|---|---|
18.480 | 12708 | 21 |
18.490 | 33392 | 23 |
18.500 | 33466 | 42 |
18.510 | 16818 | 13 |
18.520 | 10831 | 11 |
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