One of the big changes in companies like BHP and RIO is that they have narrowed their earnings base considerably by going from truly multicommodity miners to focusing on only 4 or 5 minerals. Granted, even the "old" companies would be in strife right now as commodity prices are down across the board. However, by focussing on "four pillars" (+1 for BHP) any one event in one commodity now exaggerates the affect on the company as a whole.
BHP's S32 spinoff made some sense on a scale argument and how the businesses spun out added little to BHP's bottom line, but rather than reducing risk I believe they have increased it. Much like a share portfolio, there is strength in diversity. I know there were many other reasons for divestment (the cynic in me certainly recognises the need to get rid of future expensive legacy issues), but I wonder if market segmentation and the "beta" of the businesses were really thought through?
On another topic, BHP sunk to $18.22 during the GFC. It has since spun out S32 with a market cap of nearly $7,000B, or about 10% of BHP's mkt cap. Logically, any support level for BHP has dropped by 10%, or about $2/share. Unless the global outlook improves, I suspect there is still more weakness to come.
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Last
$38.45 |
Change
-0.460(1.18%) |
Mkt cap ! $195.0B |
Open | High | Low | Value | Volume |
$39.00 | $39.07 | $38.28 | $323.2M | 8.359M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
7 | 1696 | $38.45 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$38.46 | 24810 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
4 | 708 | 38.450 |
1 | 3000 | 38.440 |
1 | 26 | 38.420 |
2 | 1745 | 38.410 |
9 | 3475 | 38.400 |
Price($) | Vol. | No. |
---|---|---|
38.500 | 135 | 1 |
38.540 | 350 | 1 |
38.550 | 200 | 1 |
38.700 | 13 | 1 |
38.720 | 426 | 1 |
Last trade - 16.10pm 06/09/2024 (20 minute delay) ? |
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