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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Last
$22.52 |
Change
-0.070(0.31%) |
Mkt cap ! $69.41B |
Open | High | Low | Value | Volume |
$22.46 | $22.63 | $22.35 | $60.76M | 2.644M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
14 | 1947 | $22.52 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$22.53 | 11371 | 52 |
View Market Depth
No. | Vol. | Price($) |
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12 | 2696 | 22.520 |
13 | 4323 | 22.510 |
24 | 20652 | 22.500 |
10 | 6287 | 22.490 |
10 | 25114 | 22.480 |
Price($) | Vol. | No. |
---|---|---|
22.530 | 9501 | 47 |
22.540 | 5441 | 18 |
22.550 | 6020 | 20 |
22.560 | 6169 | 15 |
22.570 | 19191 | 9 |
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