$5 back on the cards, page-62

IO price steady at US$38.00mt, Dow Jones up 90 points, should be agood day today all things being equal.

Since FMG went ex-dividend price was $4.33, closed at $4.54 and retreated back to $4.42.

Considering it went ex-dividend at $4.33, it is still up 9.00 cents, which is not a bad outcome.

Waiting on Formosa deal to be approved by FIRB and planned debt reduction announcement for this stock to kick to $5.00.

Sept qtr production and revenue should be a great result taking into account AUD in July & August (has increased in last few days) and steady IO prices to give FMG an even greater boost.

With total costs at low $70mt and IO prices at $130mt since 1 July, profit and cash generated will be a record result for FMG.

Rating agencies have maintained or increased credit rating is also a big positive, considering analysts were confirming the demise of FMG just 6 months ago.

Costs decreasing significantly, IO price steady, AUD , Capex coming to an end, cash reserves increasing and planned debt reduction can only point to one thing, and that is that the SP will increase significantly IMO.

Even with a margin loan , I will continue to hold as all of the fundamentals are positive. I could be wrong but rather than trust analysis provided by the likes of Morningstar (target price of $2.20) I would rather trust my instincts and research I have done, adding also that FMG management has not disappointed to date and handled the crisis in Sept 2012 in such a manner that defied all of the critics.

If the SP movers past $4.50 and remains at this level, then I will even be more comfortable going forward.

The only thing that could derail this is a plunge in IO price to below $90mt on along term basis, to date the signs of this happening is less likely based on China's strategy for economic reform and planned infrastructure projects