Analysts are quite knowledgeable about long and short term value difference - but their institutional clients dont have patience to buy stocks that have falling short term indicators.
Thats the opportunity for us as private investors.
The big funds are measured on 3 monthly performance - they cant accept being down 10% for 3 months in order to be up 20% 6 month later. Have too much of that and their money starts evaporating.
Thats why the big sell-off of FMG on Friday - UBS downgraded their FY2014 Iron Ore forecast to reflect the recent spot price weakness - and thats led to strong selling.
But from what I hear, UBS themselves say FMG is worth considerably more than $5.50 and they still like iron ore price at above $US110 long term.
But just now concensus is in disarray - JP Morgan forecast a few months ago that they think spot price is going to US$80/t, and Citi said $US 90/t - and the funds, when a strong consensus like this breaks - scurry away like rats when the light comes on.
I think there is no doubt of this being a good opportunity to buy FMG. I'm a strong believer in a consolidating wave of growth in global steel demand from 2015.
But there is nothing to say the FMG stock price wont go to $4.20 before it goes back to $5. So buyer beware.
Keep a beady eye on the Fe spot price - if it stays above $US100 then $4.50 is excellent buying in FMG imo. But right now the pros just arent sure.
The one thing you do know about FMG - even with a massive debt - above $US80/t it should be ok long term. Whereas AGO will cease to have a business.
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Last
$18.87 |
Change
0.590(3.23%) |
Mkt cap ! $58.10B |
Open | High | Low | Value | Volume |
$18.86 | $18.90 | $18.44 | $375.1M | 19.96M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
1 | 900 | $18.86 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$18.88 | 3586 | 4 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
3 | 749 | 20.500 |
3 | 3750 | 20.000 |
1 | 3914 | 19.950 |
1 | 30 | 19.900 |
5 | 3346 | 19.810 |
Price($) | Vol. | No. |
---|---|---|
17.930 | 10660 | 2 |
18.000 | 220 | 1 |
18.150 | 1 | 1 |
18.340 | 13 | 1 |
18.370 | 585 | 3 |
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