Fair Value For FMG, page-6

Here's my humble attempt. This is not investment advice so please rely on your own research only.
This may very well be seen as unsophisticated but here we go. My investment process is much more involved than this but this is a simplified look to try understanding the price with a $120 average price per ton.

The Iron Ore price seemed to trade on average at around $120 in H1 2021 (July 20 - Dec 20).
Not an exact science but perhaps a reasonably approximation.

FMG earned the following in H1 2021:
CFO = 6,094,000,000 (annualized to 12,188,000,000)
NI = 5,650,000,000 (annualized to 11,300,000,000)
Shares Outstanding end of period = 3,087,000,000

If you average the annualized Operating Cash Flow Yield and the Net Income yield you get a income of $3.8043 / Share ((12,188,000,000+11,300,000,000) / 2 ) / 3,087,000,000 = $3.8043 / Share

Based on closing share price of 20.13, this gives you an average Cash Flow/Net Income annual yield of 18.74%.
I always average out the Net Income and Operating Cash Flow yield because I feel it more closely approximates the return investors get over time. Neither measure is perfect which is why I average the two to provide a more reasonably approximation of the return over time.

So, based on my calculations a consistent $120 Iron Ore price should in theory yields you a approximately 18.74% return on investment.

Let's say the average investor is willing to accept half that yield, i.e. only requires a yield of 9.37% to invest in FMG, they would accept a price of $40.26 (i.e. 20.13 x 2).

Of course, the price will always fluctuate above or below $120 so take this analysis with a grain of salt. It is theoretical only.
The Iron Ore price is hard to predict so rather than try predict the price of iron ore, I try answer the question of whether I believe the conditions now or more or less bullish for the price of ore than conditions in the past.
With so much fiscal spending happening, my personal view is the conditions are ripe for higher prices.

Now this is a very rough approximation of things from a very novice investor.
I am not an investment advisor and I am not in any way providing investment advice or inducing you to trade based on this information.
I could be drastically wrong in my calculations and numbers as stated above, so please in no way take this as investment advice.
Therefore, please rely only on your own research on now what I have stated above.