In this article we look at BHP, an investment held in practically all our clients’ portfolios. We recently asked Michael Steengaard of Macquarie Equities Ltd for his views based on the research his organisation does on BHP. (This information was published in January 2012. Check in with us to get a current update.)
A. BHP’s main business comprise Iron Ore (45% of earnings), Petroleum (21%) and Copper (14%)
A. All are up for the quarter and comfortably meeting expectations. The company has just released their latest figures and report a solid set of December quarter production results with the following highlights:
• Iron Ore in the Pilbara, WA set another production and sales record
• US oil and gas volumes met upwardly revised numbers
• Copper volumes benefitted from the lack of strike action of the previous quarter at the Escondida mine in Chile and completed maintenance outages at Pampa Norte in Chile and Olympic Dam in South Australia.
A. We believe the structural Chinese growth dynamic remains a powerful driver of, and partial insulating factor for, sustained commodity prices over the next few years which augers well for BHP. Our long-term valuations are highly supportive of clients holding BHP Billiton.