You are here: Home - Uncategorized -

Stock of the week: BHP Billiton returns to ‘buy’ list

0
Written by: YourMoney.com
27/02/2017
Helal Miah, investment research analyst at The Share Centre, explains why BHP Billiton is stock of the week – and why the mining and commodities giant has been restored to the broker's ‘buy’ list.

It’s been a tough few years for the mining sector. Demand for commodities in China slowed just as the mining companies were aggressively expanding capacity and production. This led to a supply glut and a fall in commodity prices. Big mining groups such as BHP Billiton suffered as a result and huge asset sales were made, along with enormous losses and dividend cuts.

The mining groups have therefore cut back on large scale investment programmes, drastically cut their costs and focused on balance sheet repair. This has left the likes of BHP Billiton as far more streamlined operations. On top of this we have seen a modest recovery in a broad range of commodities since the lows of early 2016.

These factors have led to BHP reporting encouraging numbers in recent trading updates. At the half year stage they reported profits of $3.2bn versus a loss a year earlier of $5.7bn, net operating cash flows were up by 46%, the interim dividends jumped to 40c from 15c while the net debt had fallen by 23% to $20bn.

The restructuring is taking BHP Billiton back in the right direction and we believe that the worst may be over for the commodities sector. We are therefore reinstating our ‘buy’ recommendation on the stock for investors seeking balanced return and willing to accept a medium to high level of risk.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get in the second lockdown?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
energy supplier
Surge in number of energy customers switching supplier

Energy switching hit a six-year high last year as more households shopped around for a better deal.

Close