Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

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<li>
<a href="https://www.smartkarma.com/entities/fortescue-metals-group-ltd" target="_blank" data-smartkarma-citation="entities:41:1" rel="noopener">Fortescue Metals (FMG AU)</a> has corrected due to the iron ore price dropping. China's massive stimulus could provide an impetus to demand in 6-8 months and revive pricing.</li>
<li>Substantial correction of steel margins is halted. Iron ore the inventory at the mills and ports has now stabilized. We believe this provides support to pricing at these levels.</li>
<li>
<a href="https://www.smartkarma.com/entities/fortescue-metals-group-ltd" target="_blank" data-smartkarma-citation="entities:41:1" rel="noopener">Fortescue Metals (FMG AU)</a> yields at the spot have dropped to 12% FCF and 9% dividend yields, but we believe there is an upside to this.</li>
</ul>



Fortescue Metals (FMG AU) has corrected due to the iron ore price dropping. China's massive stimulus could provide an impetus to demand in 6-8 months and revive pricing.
Substantial correction of steel margins is halted. Iron ore the inventory at the mills and ports has now stabilized. We believe this provides support to pricing at these levels.

Fortescue Metals (FMG AU) yields at the spot have dropped to 12% FCF and 9% dividend yields, but we believe there is an upside to this.


China Stimulus: Big Loan Growth Numbers, Good for FMG?

<ul>
<li>
<a href="https://www.smartkarma.com/entities/fortescue-metals-group-ltd" target="_blank" data-smartkarma-citation="entities:41:1" rel="noopener">Fortescue Metals (FMG AU)</a> has an improving yield outlook, as iron ore prices are rising due to a shortage of iron ore, with supplies from Russia and Ukraine being affected.</li>
<li>We expect the company to pay a 2.3 AUD/share dividend based on a 70% payout ratio, implying an 11% dividend yield. The company has low net gearing at 10%.</li>
<li>Upsides could emerge from China stimulating its economy to counter the lockdowns and measures taken to improve their property market which will in turn boost steel production. </li>
</ul>



Fortescue Metals (FMG AU) has an improving yield outlook, as iron ore prices are rising due to a shortage of iron ore, with supplies from Russia and Ukraine being affected.
We expect the company to pay a 2.3 AUD/share dividend based on a 70% payout ratio, implying an 11% dividend yield. The company has low net gearing at 10%.
Upsides could emerge from China stimulating its economy to counter the lockdowns and measures taken to improve their property market which will in turn boost steel production. 


Fortescue Metals Group: 11% Dividend Yield for FY22

<ul>
<li>Over the last three years, <a href="https://www.smartkarma.com/entities/fortescue-metals-group-ltd" target="_blank" data-smartkarma-citation="entities:41:1" rel="noopener">Fortescue Metals (FMG AU)</a> has paid shareholders 6.5 AUD/share of dividends, equivalent to 34% of today's share price. </li>
<li>
<a href="https://www.smartkarma.com/entities/fortescue-metals-group-ltd" target="_blank" data-smartkarma-citation="entities:41:1" rel="noopener">Fortescue Metals (FMG AU)</a> at a 130$/ton iron ore price implies a 12% dividend yield. China's recent easing measures to boost property give us confidence in iron ore prices.</li>
<li>Fortescue's strong net cash balance sheet position ( 2.6 bn USD ) provides a decent margin of safety. </li>
</ul>


Over the last three years, Fortescue Metals (FMG AU) has paid shareholders 6.5 AUD/share of dividends, equivalent to 34% of today's share price. 

Fortescue Metals (FMG AU) at a 130$/ton iron ore price implies a 12% dividend yield. China's recent easing measures to boost property give us confidence in iron ore prices.
Fortescue's strong net cash balance sheet position ( 2.6 bn USD ) provides a decent margin of safety. 


Global Special Situations & Strategy, SR Services Ltd

David Lepper

Global Special Situations & Strategy

SR Services Ltd

SR Services provides Strategic Knowledge and Solutions services for Family Offices and Corporate Business. 

We deliver this via advisory services, strategic planning, opportunity analysis/sourcing, as well as solution implementation. 

Whilst, we create intellectual discipline and operational leverage for your projects or daily activities, our ultimate objective is to empower whilst enhancing your decision making. 

Strategic Knowledge and Solutions

Cross Asset Strategy

What is the key question? Are we at the start of another 12-year bull market in value stocks? That's the duration of the last period when the value style of investing out performed growth in the Asia Pacific region.What is the evidence? Over the last 12-months, the balance between growth and value reversed the dominance that growth has held for much of the last 10-years. Whilst in Q1 2021, we remained cautious about a full declaration that the trend is reversing, we feel that the process is indeed underway and that a multi-year reversal is in progress. This is not just positive for value investors, but increasingly so for Small-Mid Cap investors.Why read this screening note? Q1 2021’s screen performance trumped the market delivering relative outperformance of 26.2%. Of the 27 names presented, 18 stocks delivered positive share price performance with an average increase of 21%, whilst the remaining 9 stocks declined 9.4 %. What is presented? 56 names appear in our Q3 2021 Asia Pacific list providing plenty of opportunity for investors. The average EV/FCF multiple of 5.2x in Q3 2021 compared to 6.3x in Q1 2021 and 5.6x in Q2 2020. The average Free Cashflow multiple on equity is 4.6x in Q3 2021 versus 4.2x in Q1 2021.

What is the key question? Are we at the start of another 12-year bull market in value stocks? That's the duration of the last period when the value style of investing out performed growth in the Asia Pacific region.What is the evidence? Over the last 12-months, the balance between growth and value reversed the dominance that growth has held for much of the last 10-years. Whilst in Q1 2021, we remained cautious about a full declaration that the trend is reversing, we feel that the process is indeed underway and that a multi-year reversal is in progress. This is not just positive for value investors, but increasingly so for Small-Mid Cap investors.Why read this screening note? Q1 2021’s screen performance trumped the market delivering relative outperformance of 26.2%. Of the 27 names presented, 18 stocks delivered positive share price performance with an average increase of 21%, whilst the remaining 9 stocks declined 9.4 %. What is presented? 56 names appear in our Q3 2021 Asia Pacific list providing plenty of opportunity for investors. The average EV/FCF multiple of 5.2x in Q3 2021 compared to 6.3x in Q1 2021 and 5.6x in Q2 2020. The average Free Cashflow multiple on equity is 4.6x in Q3 2021 versus 4.2x in Q1 2021.

Screening the Silk Road: Q3 2021 All Cap Screening - Free Cashflow (FCF)

<a href="https://www.smartkarma.com/entities/fortescue-metals-group-ltd" target="_blank" data-smartkarma-citation="entities:41:1" rel="noopener">Fortescue Metals (FMG AU)</a> production reports and results are on the way. Given the strength in pricing, we forecast with the 62% Fe averaging 177$/ton for H2 2021; we see a 6.4 bn USD profit for H2 2021 and full-year profit over 10.5 bn USD. We also see them maintain an 85% payout ratio and distribute a dividend over 2.3 AUD/share, the full-year dividend almost representing a 15.5% yield. As mentioned in my piece ( <a href="https://www.smartkarma.com/insights/core-correlations-14th-june-vale-shanxi-mine-closures-keep-iron-ore-prices-elevated-long-62" target="_blank" data-smartkarma-citation="insights:52950" rel="noopener">Core Correlations 14th June: Vale/ Shanxi Mine Closures Keep Iron Ore Prices Elevated. Long 62.</a> ), disruptions continue to provide a tailwind to pricing. We see a short-term upside of 15-20% on the stock into its production report and financial results.

Fortescue Metals (FMG AU) production reports and results are on the way. Given the strength in pricing, we forecast with the 62% Fe averaging 177$/ton for H2 2021; we see a 6.4 bn USD profit for H2 2021 and full-year profit over 10.5 bn USD. We also see them maintain an 85% payout ratio and distribute a dividend over 2.3 AUD/share, the full-year dividend almost representing a 15.5% yield. As mentioned in my piece ( Core Correlations 14th June: Vale/ Shanxi Mine Closures Keep Iron Ore Prices Elevated. Long 62. ), disruptions continue to provide a tailwind to pricing. We see a short-term upside of 15-20% on the stock into its production report and financial results.

Fortescue: A Big Dividend Coming Your Way!

Australia

Fortescue Metals Group Ltd. explores for and produces iron ore. The Company conducts business worldwide.

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Fortescue Metals (FMG AU)

China Stimulus: Big Loan Growth Numbers, Good for FMG?

Fortescue Metals (FMG AU) yields at the spot have dropped to 12% FCF and 9% dividend yields, but we believe there is an upside to this as China...

Sameer Taneja

Fortescue Metals Group: 11% Dividend Yield for FY22

Fortescue provides investors with an 11% dividend yield (based on a 135$/ton spot price). Current prices are much higher at 160$/ton and have...

Sameer Taneja

Fortescue > 12% Dividend Yield Play

Fortescue Metals is a beneficiary of China loosening. It trades at a 6.8x PE with a 12% div yield, and a historical record of returning almost 34%...

Sameer Taneja

Screening the Silk Road: Q3 2021 All Cap Screening - Free Cashflow (FCF)

Is it the start of a 12-year bull market in value? That's the duration of the last period when APAC value outperformed growth. Q'1s FCF screen...

David Lepper

Fortescue: A Big Dividend Coming Your Way!

Strong H2 2021 profits for Fortescue of >6.4 bn USD with an annual dividend yield of 15% make it a good short-term pick into the results.

Sameer Taneja

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