Iron ore price, page-31774

Lads I had a look across a number of iron ore companies. Rio. FMG. CIA. GRR. All seem to be trading at incredibly low PEs. Some less than 1 for forward PE. All less than 4 on my maths.

The low PE of the share prices are so consistent across the industry that it cannot be stock manipulation it can only be a trend. The possible trends I see are;

1. Analysts might not have caught up with the future earnings of iron ore miners based on current ore prices.

2. Analysts at institutions reviewing the market believe this iron ore price cycle is a blip and won't last long enough to justify high iron ore prices.

3. Analysts at institutions are aware of the forward earnings but are factoring in really high risk premiums due to the risk of action from China against Australian iron ore miners.

I think it is probably a combination of all 3 reasons.

The thing for me is that even if iron ore falls to USD100 per tonne I still think fmg is a buy. So the current fmg share price seems to have a large factor of safety built in to it.