FMG is way overvalued. The dividend appears to disguise the level of debt by creating a distraction and illusion.
The P/e ratio is often used justify company value and is accepted as a measure of value. The problem with FMG they are on a cost cutting exercise which appears to be a measure to stay solvent. Cost cutting for the purpose of solvency is a dangerous game.
Cost cutting from $15.80 to $28.48 is quite a drop and too good to be true. What have they cut?
Cost cutting to this level in opinion doesn't appear credible or very creative accounting.
$US15.80 per wet metric tonne, compared to $US28.48 a tonne reported a year ago.
http://www.abc.net.au/news/2016-01-28/fortescue-cuts-costs-as-iron-ore-prices-fall/7120390
The current iron ore price and oil price is a dead cat bounce and there will be a lot more pain.
How will they survive when Iron ore prices fall down to $15 ton.
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$21.26 |
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-0.450(2.07%) |
Mkt cap ! $65.45B |
Open | High | Low | Value | Volume |
$21.70 | $21.70 | $21.02 | $145.2M | 6.814M |
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No. | Vol. | Price($) |
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1 | 9760 | $21.26 |
Sellers (Offers)
Price($) | Vol. | No. |
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No. | Vol. | Price($) |
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2 | 1000 | 21.250 |
4 | 12614 | 21.220 |
1 | 5000 | 21.210 |
1 | 132 | 21.190 |
2 | 37157 | 21.170 |
Price($) | Vol. | No. |
---|---|---|
21.270 | 2057 | 3 |
21.300 | 1000 | 1 |
21.320 | 13727 | 2 |
21.340 | 150 | 1 |
21.350 | 21030 | 5 |
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