So BHP is heading back to the level it was when it merged with Billiton at $8!!
I can not wait for it to happen. My piggy bank is ready to be emptied.
They used to have about 5.9 billion shares on issue, but this is now down to 5.35 billion. So they bought back 550 million shares, at say $32/shares, which implies total outlays of $17.6 billion. Current debt is $36 b plus they have about $10b in accounts payables. Looks a lot like they geared up the company to buy back shares and reduce tax payments. Cash is $8b, which should be able to service the debt and help pay short term debts but I doubt they will be willing to use any of this for a share buyback.
The unfranked dividend yield is an interesting 4.8%, grossed up FF it becomes 6.85% which is probably around what the banks pay. But that depends on them being able to maintain last years dividend of $USD1.21, which seems unlikely in the face of falling commodity prices.
BHP is one to watch, as the commodity boom will come back once India gets going in a few years time.
loki
BHP Price at posting:
$29.40 Sentiment: None Disclosure: Not Held
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