Showing posts with label BHP Billiton. Show all posts
Showing posts with label BHP Billiton. Show all posts
Thursday, October 11, 2012
BHP (BHP) (EOG) (KEG) (NBL) (PDCE) Downgraded
BHP Billiton (BHP), EOG Resources (EOG), Key Energy (KEG), Noble Energy (NBL) and PDC Energy Inc. (PDCE) were downgraded by analysts.
Canaccord Genuity downgraded BHP Billiton (BHP) from a "Buy" rating to a "Hold" rating.
Tudor Pickering downgraded EOG Resources (EOG) from a "Buy" rating to a "Accumulate" rating.
Howard Weil downgraded Key Energy (KEG) from an "Outperform" rating to a "Market Perform" rating.
Wells Fargo & Co. downgraded Noble Energy (NBL) from an "Outperform" rating to a "Market Perform" rating.
Wells Fargo & Co. downgraded PDC Energy Inc. (PDCE) from an "Outperform" rating to a "Market Perform" rating.
Friday, August 3, 2012
BHP (BHP) Writes Down $3.3 Billion
BHP Billiton (BHP) CEO Marius Kloppers announced the company has written down 3.3 billion on its gas and nickel assets.
Its gas assets in the Fayetteville shale-gas holdings of the company had a charge of $2.84 billion against it, while its Western Australia nickel sites were written down by $450 million.
The company said Klopper and petroleum business CEO Mike Yeager won't receive bonuses this year as a consequence of the writedowns. Both men requested that those actions be taken.
Companies jumping onto the shale gas bonanza have taken hard hits after the abundance of natural gas has driven the price down to 10-year lows recently.
BHP will continue to struggle with this because of the high price it paid for the gas assets, which will require a significant rebound in gas prices before it turns a profit.
The good news for BHP is the writedown was not as much as most had been looking for, coming in at the lower end of analysts' estimates, which were in a range of $3 billion to $5 billion.
Kloppers and Yeager are now moving drilling operations primarily to the Eagle Ford and Permian fields.
It is thought the company may seek to divest itself of its nickel business, but that would probably not work out well for them in a weak economic environment.
On the NYSE, BHP was trading at $67.8, up $1.78, or 2.69 percent, as of 10:33 AM EST.
Its gas assets in the Fayetteville shale-gas holdings of the company had a charge of $2.84 billion against it, while its Western Australia nickel sites were written down by $450 million.
The company said Klopper and petroleum business CEO Mike Yeager won't receive bonuses this year as a consequence of the writedowns. Both men requested that those actions be taken.
Companies jumping onto the shale gas bonanza have taken hard hits after the abundance of natural gas has driven the price down to 10-year lows recently.
BHP will continue to struggle with this because of the high price it paid for the gas assets, which will require a significant rebound in gas prices before it turns a profit.
The good news for BHP is the writedown was not as much as most had been looking for, coming in at the lower end of analysts' estimates, which were in a range of $3 billion to $5 billion.
Kloppers and Yeager are now moving drilling operations primarily to the Eagle Ford and Permian fields.
It is thought the company may seek to divest itself of its nickel business, but that would probably not work out well for them in a weak economic environment.
On the NYSE, BHP was trading at $67.8, up $1.78, or 2.69 percent, as of 10:33 AM EST.
Friday, June 1, 2012
BHP (BHP) Over the Long Term
Mining giant BHP (NYSE: BHP), as with most commodity companies, has been under a lot of pressure, as the ongoing weak global economy, concerns over Europe, and slowing growth in China, has investors concerned over the short - and mid-term growth prospects of the company.
A couple of major items have been weighing on the company. First is the recent announcement that the company won't be putting its money into growth projects, which it had originally expected to pour $80 billion into over the next five years.
Chairman Jacques Nasser said the $80 billion expansion proposed by CEO Marius Kloppers in 2011 won't be happening, although it isn't clear how much will go into expansion going forward.
Nasser added that he expects commodity markets to continue to weaken, as confidence in a global economic recovery deteriorates.
The second major challenges facing BHP is the uncertainty surrounding Olympic Dam project in Australia.
BHP wants to delay the development of the project, while the Australian government is threatening the company, as South Australian Premier Jay Weatherill, who appears clueless and emotionally driven, saying in the Australian National Affairs, May 25th edition, that the reasons given by BHP for the potential delay are "artificial."
This bizarre assessment appears to be completely politically motivated, as the reasons proffered by BHP are totally reasonable, and based upon market and economic conditions and nothing else.
BHP is wise and prudent in delaying the project, and the company surely won't jeopardize itself and shareholders to placate politicians.
A couple of major items have been weighing on the company. First is the recent announcement that the company won't be putting its money into growth projects, which it had originally expected to pour $80 billion into over the next five years.
Chairman Jacques Nasser said the $80 billion expansion proposed by CEO Marius Kloppers in 2011 won't be happening, although it isn't clear how much will go into expansion going forward.
Nasser added that he expects commodity markets to continue to weaken, as confidence in a global economic recovery deteriorates.
The second major challenges facing BHP is the uncertainty surrounding Olympic Dam project in Australia.
BHP wants to delay the development of the project, while the Australian government is threatening the company, as South Australian Premier Jay Weatherill, who appears clueless and emotionally driven, saying in the Australian National Affairs, May 25th edition, that the reasons given by BHP for the potential delay are "artificial."
This bizarre assessment appears to be completely politically motivated, as the reasons proffered by BHP are totally reasonable, and based upon market and economic conditions and nothing else.
BHP is wise and prudent in delaying the project, and the company surely won't jeopardize itself and shareholders to placate politicians.
Tuesday, May 22, 2012
BHP (BHP), Coal Unions Reach Impasse
BHP Billiton and the coal unions of Queensland haven't come to an agreement over safety staffing issues, and the radical unions have threatened to strike on Thursday, according to the Daily Telegraph.
BMA asset president Stephen Dumble said this, "Each of the solutions BMA has proposed has been rejected by the unions.
"The current BMA enterprise agreement negotiation is at an impasse over exactly this type of issue where unions want to ignore current market and employment trends and instead preserve a status quo position for their own industrial ends.
"The issue in question is too important to be caught up in this way. It is a real issue which demands a real solution."
Contractors are now running the safety staffing operations at the company.
The coal unions have also rejected a far-too-generous pay offer of an additional 15 percent over the next three years, which also includes a $15,000 bonus.
BHP has threatened to take that off the table if an agreement isn't reached soon.
They should take if off the table with the commodities markets weakening, with more contraction expected to happen in the short term. Over the long haul commodity prices will continue to rise as demand will guarantee the bull market in commodities will continue.
BHP closed Monday at $64.47, gaining $1.98, or 3.17 percent.
BMA asset president Stephen Dumble said this, "Each of the solutions BMA has proposed has been rejected by the unions.
"The current BMA enterprise agreement negotiation is at an impasse over exactly this type of issue where unions want to ignore current market and employment trends and instead preserve a status quo position for their own industrial ends.
"The issue in question is too important to be caught up in this way. It is a real issue which demands a real solution."
Contractors are now running the safety staffing operations at the company.
The coal unions have also rejected a far-too-generous pay offer of an additional 15 percent over the next three years, which also includes a $15,000 bonus.
BHP has threatened to take that off the table if an agreement isn't reached soon.
They should take if off the table with the commodities markets weakening, with more contraction expected to happen in the short term. Over the long haul commodity prices will continue to rise as demand will guarantee the bull market in commodities will continue.
BHP closed Monday at $64.47, gaining $1.98, or 3.17 percent.
Friday, October 21, 2011
BHP (BHP) (NFX) (FDX) (FSL) (PENN) (PETM) Downgraded
BHP Billiton (NYSE: BHP), Newfield Exploration Co. (NYSE: NFX), FedEx (NYSE: FDX), Freescale Semi (NYSE: FSL), Penn National Gaming (NASDAQ: PENN) and Petsmart Inc (NASDAQ: PETM) had analyst downgrades.
Newfield Exploration Co. (NFX) was downgraded by Macquarie from an “Outperform” rating to a “Neutral” rating.
BHP Billiton (BHP) was downgraded by HSBC (NYSE:HBC) from an “Overweight” rating to a “Neutral” rating.
FedEx (FDX) was downgraded by Standpoint Research from a “Buy” rating to a “Hold” rating.
Freescale Semi (FSL) was downgraded by BMO Capital Markets from an “Outperform” rating to a “Market Perform” rating.
Penn National Gaming (PENN) was downgraded by Brean Murray from a “Buy” rating to a “Hold” rating.
Petsmart Inc. (PETM) was downgraded by Wells Fargo & Co. (NYSE:WFC) from an “Outperform” rating to a “Market Perform” rating.
Newfield Exploration Co. (NFX) was downgraded by Macquarie from an “Outperform” rating to a “Neutral” rating.
BHP Billiton (BHP) was downgraded by HSBC (NYSE:HBC) from an “Overweight” rating to a “Neutral” rating.
FedEx (FDX) was downgraded by Standpoint Research from a “Buy” rating to a “Hold” rating.
Freescale Semi (FSL) was downgraded by BMO Capital Markets from an “Outperform” rating to a “Market Perform” rating.
Penn National Gaming (PENN) was downgraded by Brean Murray from a “Buy” rating to a “Hold” rating.
Petsmart Inc. (PETM) was downgraded by Wells Fargo & Co. (NYSE:WFC) from an “Outperform” rating to a “Market Perform” rating.
Friday, November 5, 2010
Cliffs Natural Resources (NYSE:CLF), BHP (NYSE:BHP), Rio Tinto (NYSE:RTP), Vale (NYSE:VALE) Move Up as Commodity Prices Surge
The expected positive disruption in the commodity sector has happened in a big way after the announcement by the Federal Reserve that they were going to resume inflating, and natural resource companies like Cliffs Natural Resources (NYSE:CLF), BHP Billiton (NYSE:BHP), Rio Tinto (NYSE:RTP), Vale SA (NYSE:VALE) all soared with the inevitable plunge in value of the U.S. dollar accompanying the quantitative easing.
Gold prices are soaring to new highs, as spot gold approached $1,400 an ounce at the end of closing on Thursday. Aluminum prices also reached levels not seen since April.
BHP closed Thursday at $91.20, gaining $5.12, or 5.95 percent. Cliffs ended the session at an even $70, rising $3.13, or 4.68 percent. Rio Tinto surged to close in New York at $70.52, increasing by $3.74, or 5.60 percent. Vale SA ended the day at $33.80, rising by $1.34, or 4.13 percent.
The overall commodity sector exploded Thursday as what appears to be pent-up expectation and anticipation concerning the Fed move poured out through investors putting their money into the commodity sector in a big way.
Gold prices are soaring to new highs, as spot gold approached $1,400 an ounce at the end of closing on Thursday. Aluminum prices also reached levels not seen since April.
BHP closed Thursday at $91.20, gaining $5.12, or 5.95 percent. Cliffs ended the session at an even $70, rising $3.13, or 4.68 percent. Rio Tinto surged to close in New York at $70.52, increasing by $3.74, or 5.60 percent. Vale SA ended the day at $33.80, rising by $1.34, or 4.13 percent.
The overall commodity sector exploded Thursday as what appears to be pent-up expectation and anticipation concerning the Fed move poured out through investors putting their money into the commodity sector in a big way.
Thursday, November 4, 2010
BHP (NYSE:BHP) Bid for Potash (NYSE:POT) Rejected by Comrades in Canada
In a strange twist to at least some parts of Canada, the nation seems to be degenerating into a country as nationalist and socialist as they come, as evidenced by their rejection of the bid by BHP Billiton (NYSE:BHP) for fertilizer giant Potash Corp. (NYSE:POT).
The alleged and unexplained reason for the rejection was the ambiguous idea it wasn't a "net benefit" to Canada.
Saskatchewan Premier Brad Wall, who is already being hailed as a hero from what is nothing other than protectionism, is considered now to be a rising star, showing the impetus behind the populist stand he took for Canada, of course.
While some local and provincial politicians in Canada may get some gain out of this, the very public nature of the issue put Canada in a bad light, and flies in the face of their being considered a good country to invest in.
Although the unproven assertion in the past that tax revenue would be lost if they deal went through was the main rallying point of the public debate, when the decision was announced, there was no reason given other than the tired, old idea it wasn't for the net benefit of Canada.
Canpotex, which is the marketing arm of the Canadian potash industry comprised of Mosaic (NYSE:MOS), Agrium (NYSE:AGU) and Potash Corp., is one of the largest and most powerful monopolies in the world, and competes with the Belarusian Potash Company, their chief rival, who is just as powerful in their markets. They also opposed the BHP bid for Potash.
There will be a huge backlash over this as time goes on, not only from the perspective of protectionism, but of greed by the unholy marriage of business and government, which are both maintaining fixed prices and supply of potash in order to keep the margins up and the government coffers of Saskatchewan filled.
When the backlash will come will be the rising costs of food, which will ultimately be traced back to the rejection of the BHP bid, which if it had been approved, would have resulted in finally breaking up this immoral monopoly, and resulted in prices of fertilizer falling.
That's the lack of honesty from Canada in this matter, as it isn't too hard to realize if more fertilizer is sold at better prices, the turnover of product generates similar, if not more, revenue. Just look at Wal-Mart (NYSE:WMT) as one of the best examples of that for their inventory, which they turn over so many times it makes up for the lower margins.
We'll be hear to continually remind readers of the outrage this will be seen as in the future. The best thing that could happen would be for this cartel to be broken up and real free markets and businesses competing against each other, not fixing prices to maintain margins and government payouts.
Amazing to see Canada starting to act like former communist countries in terms of control of businesses at a time they're experimenting more with free markets. Now we have comrades right on the American border.
The alleged and unexplained reason for the rejection was the ambiguous idea it wasn't a "net benefit" to Canada.
Saskatchewan Premier Brad Wall, who is already being hailed as a hero from what is nothing other than protectionism, is considered now to be a rising star, showing the impetus behind the populist stand he took for Canada, of course.
While some local and provincial politicians in Canada may get some gain out of this, the very public nature of the issue put Canada in a bad light, and flies in the face of their being considered a good country to invest in.
Although the unproven assertion in the past that tax revenue would be lost if they deal went through was the main rallying point of the public debate, when the decision was announced, there was no reason given other than the tired, old idea it wasn't for the net benefit of Canada.
Canpotex, which is the marketing arm of the Canadian potash industry comprised of Mosaic (NYSE:MOS), Agrium (NYSE:AGU) and Potash Corp., is one of the largest and most powerful monopolies in the world, and competes with the Belarusian Potash Company, their chief rival, who is just as powerful in their markets. They also opposed the BHP bid for Potash.
There will be a huge backlash over this as time goes on, not only from the perspective of protectionism, but of greed by the unholy marriage of business and government, which are both maintaining fixed prices and supply of potash in order to keep the margins up and the government coffers of Saskatchewan filled.
When the backlash will come will be the rising costs of food, which will ultimately be traced back to the rejection of the BHP bid, which if it had been approved, would have resulted in finally breaking up this immoral monopoly, and resulted in prices of fertilizer falling.
That's the lack of honesty from Canada in this matter, as it isn't too hard to realize if more fertilizer is sold at better prices, the turnover of product generates similar, if not more, revenue. Just look at Wal-Mart (NYSE:WMT) as one of the best examples of that for their inventory, which they turn over so many times it makes up for the lower margins.
We'll be hear to continually remind readers of the outrage this will be seen as in the future. The best thing that could happen would be for this cartel to be broken up and real free markets and businesses competing against each other, not fixing prices to maintain margins and government payouts.
Amazing to see Canada starting to act like former communist countries in terms of control of businesses at a time they're experimenting more with free markets. Now we have comrades right on the American border.
Wednesday, November 3, 2010
BHP (NYSE:BHP) May Get Rival Bid for Potash (NYSE:POT) from Russian Company
The more you hear about the opposition to BHP's (NYSE:BHP) bid for Potash Corp. (NYSE:POT), the more you realize it's a good thing, and you check under the more carefully as to why there is such an uproar over a simple bid for the company.
It has largely to do with the misguided partnership of the province of Saskatchewan with Potash, where the Canpotex cartel wrongly manipulates prices and supply in order to maintain the prices and margins they want.
They have a major competitor in the Belarusian Canpotex cartel as well, although they seem to work closely in unison as far as pricing and supply goes, effectively controlling the overall global market.
This is why Phosagro, a Russian-based company has emerged out of nowhere as a potential bidder for Potash, as they recognize the threat to the control of potash from BHP Billiton.
Phosagro's chairman, Vladimir Litvinenko, said, "If BHP controls the potash market, the consequences for our producers may be serious ... we can lose part of [our] markets. This is obvious."
This is also the reason Saskatchewan has been opposing the bid, as they have a sweetheart royalty deal with Canpotex over potash produced in the province, and the also see BHP as a detriment to their siphoning off of billions from the above-market prices and royalties generated from the cartel.
Why this is a threat is because BHP doesn't like the cartel mentality and obvious socialist way the consortium is being operated, and have publicly stated they will produce potash at the rate they choose to and charge competitive prices, not what the other members of the cartel want them to charge, which include Mosaic (NYSE:MOS) and Agrium (NYSE:AGU).
The bottom line? BHP would be good for the industry which has been silently controlling the price of potash, which by extension, controls, to a certain degree, the price of the crops that use the fertilizer.
BHP would be one of the best things to happen to the industry if they are allowed to go forward with the bid and take charge of Potash Corp.
It has largely to do with the misguided partnership of the province of Saskatchewan with Potash, where the Canpotex cartel wrongly manipulates prices and supply in order to maintain the prices and margins they want.
They have a major competitor in the Belarusian Canpotex cartel as well, although they seem to work closely in unison as far as pricing and supply goes, effectively controlling the overall global market.
This is why Phosagro, a Russian-based company has emerged out of nowhere as a potential bidder for Potash, as they recognize the threat to the control of potash from BHP Billiton.
Phosagro's chairman, Vladimir Litvinenko, said, "If BHP controls the potash market, the consequences for our producers may be serious ... we can lose part of [our] markets. This is obvious."
This is also the reason Saskatchewan has been opposing the bid, as they have a sweetheart royalty deal with Canpotex over potash produced in the province, and the also see BHP as a detriment to their siphoning off of billions from the above-market prices and royalties generated from the cartel.
Why this is a threat is because BHP doesn't like the cartel mentality and obvious socialist way the consortium is being operated, and have publicly stated they will produce potash at the rate they choose to and charge competitive prices, not what the other members of the cartel want them to charge, which include Mosaic (NYSE:MOS) and Agrium (NYSE:AGU).
The bottom line? BHP would be good for the industry which has been silently controlling the price of potash, which by extension, controls, to a certain degree, the price of the crops that use the fertilizer.
BHP would be one of the best things to happen to the industry if they are allowed to go forward with the bid and take charge of Potash Corp.
Agrium (NYSE:AGU) Downgraded on Valuation after 3-Month Rise in Share Price
After rising over 33 percent over the last three months, Agrium's (NYSE:AGU) valuation seems to be strongly reflecting the value of the company, and Chardan downgrading them to "Neutral," citing valuation as their reasoning behind the move.
The actual ongoing run-up in share price started in July, when the company was valued at just under $50 a share, and stand today at over $87 a share.
Some of this was from increasing corn and soybean prices, but also the bid by BHP Billiton (NYSE:BHP) for Potash Corp. (NYSE:POT), which tended to offer support for the overall industry, and increase other potential takeover rumors as well.
Agrium closed Tuesday at $87.22, dropping $1.16, or 1.31 percent.
The actual ongoing run-up in share price started in July, when the company was valued at just under $50 a share, and stand today at over $87 a share.
Some of this was from increasing corn and soybean prices, but also the bid by BHP Billiton (NYSE:BHP) for Potash Corp. (NYSE:POT), which tended to offer support for the overall industry, and increase other potential takeover rumors as well.
Agrium closed Tuesday at $87.22, dropping $1.16, or 1.31 percent.
Tuesday, November 2, 2010
Freeport (NYSE:FCX), Alcoa (NYSE:AA), BHP (NYSE:BHP) Follow Commodity Prices Up
Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX), Alcoa Inc. (NYSE:AA), BHP Billiton (NYSE:BHP) are all trading higher today as the U.S. dollar plunged in value in anticipation of the decision by the Federal Reserve to inflate again, or in other words, implement more quantitative easing through buying more government debt.
Commodities were up and the miners mentioned above, as well as others followed.
Gold prices, while up moderately today, are taking a breather before the resumption of their upward climb, as the implementations of more printing of money will drive gold prices up on inflation concerns, as well as a plethora of other reasons.
Many gold miners are strongly positioned to take advantage of this, as well as other commodity-based corporations, which will be positively impacted by the increased prices of commodities.
Something to look for in any of the commodity companies will be those with strong cost-control measures in place, as their margins and earnings should soar during this time of inflating from the Federal Reserve, which most believe will be conducted incrementally over a period of time, keeping the price of commodities up for the duration, and probably longer, as demand is still a factor, even with the additional help of higher prices.
For BHP, shareholders and investors are awaiting the decision tomorrow by Canada on whether or not to allow the deal to go forward, which if is allowed, could dramatically push the share price of BHP up when also including the announced actions of the Federal Reserve.
Commodities were up and the miners mentioned above, as well as others followed.
Gold prices, while up moderately today, are taking a breather before the resumption of their upward climb, as the implementations of more printing of money will drive gold prices up on inflation concerns, as well as a plethora of other reasons.
Many gold miners are strongly positioned to take advantage of this, as well as other commodity-based corporations, which will be positively impacted by the increased prices of commodities.
Something to look for in any of the commodity companies will be those with strong cost-control measures in place, as their margins and earnings should soar during this time of inflating from the Federal Reserve, which most believe will be conducted incrementally over a period of time, keeping the price of commodities up for the duration, and probably longer, as demand is still a factor, even with the additional help of higher prices.
For BHP, shareholders and investors are awaiting the decision tomorrow by Canada on whether or not to allow the deal to go forward, which if is allowed, could dramatically push the share price of BHP up when also including the announced actions of the Federal Reserve.
Monday, November 1, 2010
BHP (NYSE:BHP) Will Wait to Raise Bid for Potash (NYSE:POT)
Although there are many guesses as to how high BHP (NYSE:BHP) will raise its bid for Potash Corp. (NYSE:POT), one thing all agree on, is they are in no hurry to do it before they pass through regulatory hurdles, and in light of no competitor emerging to challenge them for the fertilizer giant.
UBS (NYSE:UBS) has offered one of the higher price scenarios, saying they may bid as high as $165 a share to gain the company. That would be surprising if they went that high, as BHP shareholders have reportedly said they don't want the bid to go any higher than 10 percent.
That is actually good news for BHP, as there has been pressure on them to expand through acquisition, but it's good to see shareholders not willing to grow at any expense.
Yet UBS analyst Olivia Ker wrote in a note, “BHP may be prepared to pay up to this higher limit given the strength in fertilizer prices as well as an approximate 30 percent re-rating of other names in the agricultural space since the bid was announced.”
That seems like a weak argument based on the fact a major reason for the 30 percent re-rating in the industry is from the bid of BHP for Potash. There is also of course the increased price of corn and soybeans, which most believe will leave farmers with more capital, which they could spend on more fertilizer.
Nothing can or will go forward until the decision by Canada in a couple of days whether they'll allow the deal to proceed.
UBS (NYSE:UBS) has offered one of the higher price scenarios, saying they may bid as high as $165 a share to gain the company. That would be surprising if they went that high, as BHP shareholders have reportedly said they don't want the bid to go any higher than 10 percent.
That is actually good news for BHP, as there has been pressure on them to expand through acquisition, but it's good to see shareholders not willing to grow at any expense.
Yet UBS analyst Olivia Ker wrote in a note, “BHP may be prepared to pay up to this higher limit given the strength in fertilizer prices as well as an approximate 30 percent re-rating of other names in the agricultural space since the bid was announced.”
That seems like a weak argument based on the fact a major reason for the 30 percent re-rating in the industry is from the bid of BHP for Potash. There is also of course the increased price of corn and soybeans, which most believe will leave farmers with more capital, which they could spend on more fertilizer.
Nothing can or will go forward until the decision by Canada in a couple of days whether they'll allow the deal to proceed.
BHP's (NYSE:BHP) Potash (NYSE:POT) Bid Not Only Factor Driving Share Price
Although there can be no doubt the bid by BHP Billiton (NYSE:BHP) for Potash Corp. (NYSE:POT) has pushed the price of the fertilizer company up beyond its market value, it is not the only factor in the soaring share price of Potash, as evidenced by increasing corn and soybean prices which is expected to increase the amount of fertilizer farmers buy for spring planting.
UBS (NYSE:UBS) agrees with that assessment as well, maintaining their "Buy" on Potash, noting their strong support based on the pricing mentioned.
"Results were the second-highest for the third quarter in company history and were 61% above the same period last year...We revised our 2010/2011/2012 estimates from $5.77/8.35/8.68 to $5.98/8.70/9.82 to reflect the higher potash prices, updated guidance and the quarterly results."
"We believe POT’s share price is being impacted by BHP Billiton (NYSE:BHP)’s hostile bid...Given the improved fertilizer market we believe the shares would be trading above $130/share in the absence of a bid. On their Q3 call POT indicated they thought the hypothetical unaffected share price could be over $155/shr. Investment Canada is expected make its decision on the potential deal on Nov 3rd," said UBS.
If the deal is rejected by Canada, we'll all see Potash shares come crashing down, finding the actual value of the company based on market factors and not the bid.
If the deal is allowed to proceed, there may not be much more than a temporary surge in share price for Potash, as a lot of that has already been priced into the shares.
Potash closed on Friday at $145.09, soaring $2.56, or 1.80 percent. UBS has a price target of $175 on Potash, increasing it from $170 a share.
UBS (NYSE:UBS) agrees with that assessment as well, maintaining their "Buy" on Potash, noting their strong support based on the pricing mentioned.
"Results were the second-highest for the third quarter in company history and were 61% above the same period last year...We revised our 2010/2011/2012 estimates from $5.77/8.35/8.68 to $5.98/8.70/9.82 to reflect the higher potash prices, updated guidance and the quarterly results."
"We believe POT’s share price is being impacted by BHP Billiton (NYSE:BHP)’s hostile bid...Given the improved fertilizer market we believe the shares would be trading above $130/share in the absence of a bid. On their Q3 call POT indicated they thought the hypothetical unaffected share price could be over $155/shr. Investment Canada is expected make its decision on the potential deal on Nov 3rd," said UBS.
If the deal is rejected by Canada, we'll all see Potash shares come crashing down, finding the actual value of the company based on market factors and not the bid.
If the deal is allowed to proceed, there may not be much more than a temporary surge in share price for Potash, as a lot of that has already been priced into the shares.
Potash closed on Friday at $145.09, soaring $2.56, or 1.80 percent. UBS has a price target of $175 on Potash, increasing it from $170 a share.
Friday, October 29, 2010
Potash (NYSE:POT) CEO Sees Prices Reaching $600 a Ton
Potash Corp (NYSE:POT) CEO Bill Doyle said he sees the price of potash reaching a minimum of $600 a ton by 2013, as the increasing price of agricultural commodities may push farmers to boost production, which would in turn increase the demand for potash, and other fertilizers.
As the ongoing debacle over the BHP (NYSE:BHP) bid winds down, it's hard to trust anything Doyle says though, as his irrational and sometimes, childish, response to the bid, has caused him to be lowered in the eyes of many people and institutions.
In other words, even this assertion could be considered a ploy to affect the decision by the Canadian government on whether or not to allow the bid by BHP for Potash to go foward.
That's because Doyle has been attempting to make it look like Potash is far more valuable than the bid by BHP because of future, but unproven, projections of potash prices.
This doesn't mean there isn't a real support for potash prices moving up, just that the motives for Doyle expressing them are suspect.
Doyle concluded, "In my estimation, by 2013 you are going need prices free-on-board-mine of at least $600 to get to a level that you could get a 10% internal rate of return on a mine.
"And it's a ten year process, [so] you are going to need to move somewhere in that 2013, 2014 timeframe to have enough material available in the 2023/24 time level.
"So we certainly have the pricing power at the moment, and I see that
continuing for the next few years."
In the latest quarter of the company potash prices had average $305.60 a ton.
As the ongoing debacle over the BHP (NYSE:BHP) bid winds down, it's hard to trust anything Doyle says though, as his irrational and sometimes, childish, response to the bid, has caused him to be lowered in the eyes of many people and institutions.
In other words, even this assertion could be considered a ploy to affect the decision by the Canadian government on whether or not to allow the bid by BHP for Potash to go foward.
That's because Doyle has been attempting to make it look like Potash is far more valuable than the bid by BHP because of future, but unproven, projections of potash prices.
This doesn't mean there isn't a real support for potash prices moving up, just that the motives for Doyle expressing them are suspect.
Doyle concluded, "In my estimation, by 2013 you are going need prices free-on-board-mine of at least $600 to get to a level that you could get a 10% internal rate of return on a mine.
"And it's a ten year process, [so] you are going to need to move somewhere in that 2013, 2014 timeframe to have enough material available in the 2023/24 time level.
"So we certainly have the pricing power at the moment, and I see that
continuing for the next few years."
In the latest quarter of the company potash prices had average $305.60 a ton.
BHP (NYSE:BHP) Gets Interim Sealing of Potash (NYSE:POT) Complaint in Lawsuit
Chicago U.S. District Judge Charles Norgle allowed a request by (NYSE:BHP) to be awarded where parts of a complaint filed by Potash Corp. Inc. (NYSE:POT) will be sealed on an interim basis.
The judge gave BHP until the close of business on November 1 to explain why the seven paragraphs being sealed should remain so. Potash was given a three-day period to respond.
BHP has claimed the paragraphs represent “highly confidential and sensitive business information.”
A prior request to seal portions of the complaint was denied by U.S. District Judge David H. Coar. It was later on that same day BHP filed an emergency motion to have parts of the complaint sealed.
The lawsuit filed by Potash against BHP claims the giant mining company made public statements which led to the value of the shares of the fertilizer company to lose value because they were misleading to the public.
The judge gave BHP until the close of business on November 1 to explain why the seven paragraphs being sealed should remain so. Potash was given a three-day period to respond.
BHP has claimed the paragraphs represent “highly confidential and sensitive business information.”
A prior request to seal portions of the complaint was denied by U.S. District Judge David H. Coar. It was later on that same day BHP filed an emergency motion to have parts of the complaint sealed.
The lawsuit filed by Potash against BHP claims the giant mining company made public statements which led to the value of the shares of the fertilizer company to lose value because they were misleading to the public.
BHP's (NYSE:BHP) Opposition from Saskatchewan Over Potash (NYSE:POT) Bid Getting Weirder
The obsession with some politicians from Saskatchewan in their opposition to the bid by BHP Billiton for the giant fertilizer company Potash Corp. (NYSE:POT) is getting stranger and stranger, contradictory, and hypocritical.
As Opposition New Democratic leader Dwain Lingenfelter has asked of Premier Brad Wall, how can reports the First Nations are working with Chinese investors and pension funds to put together a bid coincide with Wall's making a "Captain Canada" speech last week?
In other words, as we've mentioned in the past, there seems to be something odd happening behind the scenes in the midst of these contradictory actions.
Wall has been pressuring Saskatchewan politicians to get fully behind his opposition to the deal in order to present a unified front. But that's the point Lingenfelter, that how can there be a unified front when there are other deals being put together which are essentially doing the same thing BHP is: being a foreign company bidding for the Canadian-based potash producer.
Wall continues his mantra of the deal not being a net benefit to Saskatchewan, even though independent studies have shown that not to be the case as all.
In the short term there may be some truth to it, but over a period of time, which is what really counts, it would probably end up being more beneficial to the province and Canada as a whole.
So that still begs the question of why Wall and some are so obsessed with their opposition to the BHP bid. Are they saying they'd rather have the Chinese own Potash than BHP? Why?
As Opposition New Democratic leader Dwain Lingenfelter has asked of Premier Brad Wall, how can reports the First Nations are working with Chinese investors and pension funds to put together a bid coincide with Wall's making a "Captain Canada" speech last week?
In other words, as we've mentioned in the past, there seems to be something odd happening behind the scenes in the midst of these contradictory actions.
Wall has been pressuring Saskatchewan politicians to get fully behind his opposition to the deal in order to present a unified front. But that's the point Lingenfelter, that how can there be a unified front when there are other deals being put together which are essentially doing the same thing BHP is: being a foreign company bidding for the Canadian-based potash producer.
Wall continues his mantra of the deal not being a net benefit to Saskatchewan, even though independent studies have shown that not to be the case as all.
In the short term there may be some truth to it, but over a period of time, which is what really counts, it would probably end up being more beneficial to the province and Canada as a whole.
So that still begs the question of why Wall and some are so obsessed with their opposition to the BHP bid. Are they saying they'd rather have the Chinese own Potash than BHP? Why?
BHP's (NYSE:BHP) Bid for Potash (NYSE:POT) to be Ruled on Soon by Canada
BHP Billiton (NYSE:BHP) and Potash Corp (NYSE:POT) will find out very soon whether or not the bid from BHP to take over the giant fertilizer company will be allowed to go forward by the Canadian government.
Prime Minister Stephen Harper reiterated Thursday it ruling will happen very soon. That points to the confirmation they won't attempt to extend the process by another 30 days. The ruling will thus be made on November 3.
Pressure to make the decision based on politics was set aside by Harper, who asserted it will be based on a fair evaluation of the overall deal.
The province of Saskatchewan has opposed the deal from the beginning, but some opposition to that has risen, with some starting to ask questions on why the BHP bid wouldn't be good for the country when one including the Chinese would be.
Prime Minister Stephen Harper reiterated Thursday it ruling will happen very soon. That points to the confirmation they won't attempt to extend the process by another 30 days. The ruling will thus be made on November 3.
Pressure to make the decision based on politics was set aside by Harper, who asserted it will be based on a fair evaluation of the overall deal.
The province of Saskatchewan has opposed the deal from the beginning, but some opposition to that has risen, with some starting to ask questions on why the BHP bid wouldn't be good for the country when one including the Chinese would be.
Wednesday, October 27, 2010
BHP (NYSE:BHP) Should Hold Strong on Mining Tax
Opposition to the draconian mining tax in Australia helped bring down the administration of Kevin Rudd, especially with BHP Billiton (NYSE:BHP) and CEO Marius Kloppers, and the general public, opposing it.
Hopefully will also bring down socialist Julia Gillard, who is attempting to keep the outrageous tax in place, albeit at lower levels than originally proposed.
Mining giants BHP Billiton and Rio Tinto (NYSE:RIO) have been the leaders in opposition to the outrageous tax, which will only encourage the expansion of government programs and spending instead of freedom and free markets.
The Australian states also need to be reined in, who have also set up to confiscate as much of the profits from the miners as they can get their hands on. Together it's producing a devastating impact on the industry.
A deal with the government before Gillard ousted Rudd is being attempted to be cast aside, something BHP and Kloppers especially vehemently oppose.
The best thing that could happen would be to eliminate the tax altogether, and drop the majority of the tax imposed by the states of Australia for no other purpose than to enlarge out-of-control government spending.
Austerity and limited government is the way forward, and governments around the world better get on board with it.
Hopefully will also bring down socialist Julia Gillard, who is attempting to keep the outrageous tax in place, albeit at lower levels than originally proposed.
Mining giants BHP Billiton and Rio Tinto (NYSE:RIO) have been the leaders in opposition to the outrageous tax, which will only encourage the expansion of government programs and spending instead of freedom and free markets.
The Australian states also need to be reined in, who have also set up to confiscate as much of the profits from the miners as they can get their hands on. Together it's producing a devastating impact on the industry.
A deal with the government before Gillard ousted Rudd is being attempted to be cast aside, something BHP and Kloppers especially vehemently oppose.
The best thing that could happen would be to eliminate the tax altogether, and drop the majority of the tax imposed by the states of Australia for no other purpose than to enlarge out-of-control government spending.
Austerity and limited government is the way forward, and governments around the world better get on board with it.
Monsanto (NYSE:MON) Shares Boosted on Takeover Rumors
The on-again, off-again rumors and speculation surrounding the possible takeover of agriculture giant Monsanto (NYSE:MON) are making their rounds again today, and the share price of the company shot up in response, although they've pulled back a little as the trading day has went on.
Maybe the highly reported bid by BHP (NYSE:BHP) for Potash (NYSE:POT) has stirred up the rumor pot again concerning Monsanto.
Of course plunging from their annual peak of a little over $87 a share has something to do with it as well, as they're probably considered a bargain at this time, as the probability of corn prices remaining higher is real, and that could cause the share price of Monsanto to rebound.
If a company was interested, they wouldn't want to wait for that to happen where they would then have to pay a strong premium for the company.
Monsanto will always be controversial because of its products, but they're especially weak and beaten down now, probably the reason of a potential takeover rears its head on a consistent basis.
Maybe the highly reported bid by BHP (NYSE:BHP) for Potash (NYSE:POT) has stirred up the rumor pot again concerning Monsanto.
Of course plunging from their annual peak of a little over $87 a share has something to do with it as well, as they're probably considered a bargain at this time, as the probability of corn prices remaining higher is real, and that could cause the share price of Monsanto to rebound.
If a company was interested, they wouldn't want to wait for that to happen where they would then have to pay a strong premium for the company.
Monsanto will always be controversial because of its products, but they're especially weak and beaten down now, probably the reason of a potential takeover rears its head on a consistent basis.
Tuesday, October 26, 2010
Hearing for BHP (NYSE:BHP) Challenge to Potash (NYSE:POT) Pill Scheduled for November 8
Assuming the deal is approved to go forward by November 3, BHP (NYSE:BHP) has been approved for a hearing on November 8 to challenge the attempt by Potash Corp. (NYSE:POT) make it expensive and difficult to gain a majority for the takeover.
The Canadian government will decide on November 3 whether or not to allow the deal to go forward, based on the parameters of the Investment Canada Act, which are based on whether it's beneficial for Canada for the deal to go ahead.
As far as the "poison pill" attempt by Potash, that would include allowing shareholders with 20 percent or over of outstanding common shares to be diluted. That makes it almost impossible to buy because of the prohibitive costs resulting from the dilution.
It works by giving other shareholders the option to acquire additional stock as huge discounts if they choose to.
Most of this is a delay tactic in an attempt to gain another suitor, but BHP said Potash has had ample time to find an alternative to their approximate $40 billion offer if there were legitimate offers out there.
The Canadian government will decide on November 3 whether or not to allow the deal to go forward, based on the parameters of the Investment Canada Act, which are based on whether it's beneficial for Canada for the deal to go ahead.
As far as the "poison pill" attempt by Potash, that would include allowing shareholders with 20 percent or over of outstanding common shares to be diluted. That makes it almost impossible to buy because of the prohibitive costs resulting from the dilution.
It works by giving other shareholders the option to acquire additional stock as huge discounts if they choose to.
Most of this is a delay tactic in an attempt to gain another suitor, but BHP said Potash has had ample time to find an alternative to their approximate $40 billion offer if there were legitimate offers out there.
Should BHP (NYSE:BHP) Raise its Potash (NYSE:POT) Bid?
A lot has been made of the rise in price of corn and soybeans and its affect on the bid by BHP (NYSE:BHP) for Potash Corp. (NYSE:POT), but in truth short-term fluctuations in price have little to do with valuations of a company, and if BHP raises its bid as a growing number of people believe, it shouldn't and probably won't be based on temporary crop prices.
BHP CEO Marius Kloppers has made it clear if the deal doesn't add value to shareholders, he will back away from it.
The challenge for Kloppers is he's under increased pressure to grow the company, and there simply aren't that many companies that can affect the bottom line in a way to satisfy shareholders.
So he can't pay too much for the company, but he also can't be perceived as too stingy if he does in fact lose the bid. Two prior attempts by Kloppers to make deals have failed, and he will be perceived as someone who can't get the job done or is attempting to make the wrong deals.
In the case of the recent failure to merge iron ore operations with Rio Tinto (NYSE:RIO) that was the case, so he now has to walk a fine line.
The failure of the Rio deal did have a positive effect on BHP, as it added over $5 billion to the company war chest for the Potash deal.
One caveat to the statement made about the short-term price of crops is if it is indeed considered a short term event. If it is, Potash will have to make the case for a higher bid price, if not, BHP will have to justify their price if it is thought crop prices will continue to hold or go up.
BHP CEO Marius Kloppers has made it clear if the deal doesn't add value to shareholders, he will back away from it.
The challenge for Kloppers is he's under increased pressure to grow the company, and there simply aren't that many companies that can affect the bottom line in a way to satisfy shareholders.
So he can't pay too much for the company, but he also can't be perceived as too stingy if he does in fact lose the bid. Two prior attempts by Kloppers to make deals have failed, and he will be perceived as someone who can't get the job done or is attempting to make the wrong deals.
In the case of the recent failure to merge iron ore operations with Rio Tinto (NYSE:RIO) that was the case, so he now has to walk a fine line.
The failure of the Rio deal did have a positive effect on BHP, as it added over $5 billion to the company war chest for the Potash deal.
One caveat to the statement made about the short-term price of crops is if it is indeed considered a short term event. If it is, Potash will have to make the case for a higher bid price, if not, BHP will have to justify their price if it is thought crop prices will continue to hold or go up.
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