That's hard to say.
If I were a technical trader I would suggest that it wouldn't fall through being a major $16 major support level.
But I am a fundamental value investor and in my opinion the current price is already below it's intrinsic value, hence I would consider FMG a buy at this level.
My call is based on the following factors:
- Strong cash flow generation.
- FMG is also one of the lowest cost producers.
- Aud under pressure and coupled with impact from Covid further room to fall. Favourable conditions for Australian exporters. So while the iron ore price may be coming off a bit we still have a cheaper Aud as an offset. Full disclosure, I am more bullish on the AUD longer term due to favorable industries and demographics.
- FMG is innovating into new areas of green hydrogen production and clean energy generation. Creates a point of difference to FMG vs RIO and BHP. Fully disclosure, I also own a sizeable stake in RIO. The more I read about the prospects of Green Hydrogen the more bullish I become.
- Steel should be in need with the favorable economic backdrop with governments stimulating like it's going out of business to stave off recessions.
- Steel in long term up cycle with expected demand to de-carbonise the planet.
- Very extended valuations in areas outside the commodity producer space. So some amount of valuation catch-up is possible. I also like the prospects investing in real assets rather than financial assets.
- Commodities tend to do well or better in inflationary environments. It can in some ways be seen as a hedge on inflation.
- Additionally, FMG appears to be going through a bit of a wash out at the moment which means you may be getting bargain prices. Be greedy when others are fearful, etc.
- I am trying to build out more of a income portfolio. My current positions are mostly positioned around growth and so FMG is providing me much needed diversification.
Sorry to harp on. I just thought it would be better give you a more complete answer because investing is a complicated beast.
Please don't consider this investment advice. I am not a qualified investor advisor or anything. Do your own research, etc etc...
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Last
$21.62 |
Change
-0.420(1.91%) |
Mkt cap ! $66.56B |
Open | High | Low | Value | Volume |
$21.61 | $21.78 | $21.48 | $190.2M | 8.611M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
7 | 15504 | $21.61 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$21.62 | 6560 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
2 | 55 | 21.610 |
8 | 5180 | 21.600 |
3 | 1258 | 21.580 |
3 | 1995 | 21.570 |
2 | 450 | 21.560 |
Price($) | Vol. | No. |
---|---|---|
21.650 | 1000 | 1 |
21.750 | 7200 | 2 |
21.760 | 1000 | 1 |
21.770 | 179 | 1 |
21.800 | 4913 | 6 |
Last trade - 16.10pm 19/07/2024 (20 minute delay) ? |
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