FMG 1.65% $19.65 fortescue ltd

Iron ore price, page-904

  1. 1,034 Posts.
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    As I said, even on a lower return on equity of say 20%, Fmg would still be a sound investment at $7.

    But, out of the last 8 years only 2 years have had a return on equity of less than 29%.

    The 8 year average return on equity was 42%, with the highest year being 68.5%

    The worst year was 4%, the second worse was 13% (which is equal to westpac and 3% higher than Wesfarmers)

    No doubt returns will fluctuate, but it will fluctuate both up and down, and I think being one of the worlds lowest cost producers, over time it should be pretty good average return, at least 20% in my opinion.

    Am I saying pile 100% of your funds into a single commodity stock? ... No

    I am saying that it would be a good place to own some equity as part of a mixed portfolio, and there is a good chance it will produce solid returns for you.

    Its a simple business, with good management, and its shareholder focused.
 
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