Firstly, we can look at 'ASX fair value PE multiples' all we...

Firstly, we can look at 'ASX fair value PE multiples' all we want - but the unfortunate reality with FMG is that it trades at a significant discount (30-50%) on a P/E basis to what others (i.e. banks etc) do. I think somewhere around 8-10 is a 'dream' scenario and around 6 is more normal (not arguing if that is right or wrong, just where it is for now!)

My rough (really rough) calculations on earnings then P/E for the first half were $2.5b US earnings, I'm going to call it $3.57b AUD (70c conversion rate). That's approximately $1.13 per share.

Lets say we double that (the dollar is better, IO price is better and they are shipping more ore - so doubling is VERY conservative IMO) - that gives us earnings of $2.26 per share, at a share price of $14.65 (what shade of green is it today Rurenga??) - P/E is a smidge under 6.5.

Someone smarter than me will work out forward looking estimates etc - but I'm happy with a P/E of 6.5 and yield (ex franking credits) of over 10% (can't see how they don't pay out at least 76c again for the 2H results - making it $1.52 for the full year).