BHP declined in early trade after reporting about the spinoff to a new company of its mining assets not part of its 5-core assets. This despite its 23.2% profit for the year. It seems a few investors moved the market early and may I say, short-sightedly. Rio raising its dividend and some share buyback programs created expectations and well, it just didn’t happen. The way I see it, it’s a good thing that the spinoff is happening after all 97% of its revenues are from those 5 core assets. I think the selloff is an over-reaction and UK investors disappointed since the new company lists in Australia and South Africa – not anymore in the UK. (So if you are not from the UK this is not a problem, right?!)
Nevertheless, there is that very real achievement that the company had produced a bumper profit from out of the weak iron ore prices this year. Anyway, in Australian session, the volumes in the trade shows more buyers than sellers and the price has since reversed from the opening low of 37.83.
I’m dismissing the drama and holding on given that my stops are not yet breached, it’s not the best feeling to see profit evaporate, but I am keeping cool seeing that the dividends have been increased and paying out in a few weeks time.
Here’s some more insights in this article.
In other news, this week I got wind of some new investments by legendary traders and investors. It is very interesting to see where they are going in and going out, and while I have a strong belief on what they invest on would be winners, there could still be investments that don’t turn out well as Warren Buffett also admit in his yearly letter to shareholders. Nevertheless, I am piggybacking on some of their investments while maintaining my protective stops.
My Personal Favorites:
George Soros increased his holdings of YPF SA (YPF), the Argentine oil explorer, while adding to his stakes in American International Group Inc.(AIG) and Facebook Inc.(FB).
Warren Buffett’s Berkshire Hathaway Inc. (BRK/A) bought additional shares of Verizon Communications Inc.(VZ) and Liberty Global PLC(LBTYA)
Others I am less keen on but you might be interested in are some biotech sector holdings, financial companies and commodities:
Paulson & Co. bought DirecTV (DTV), Ally Financial Inc.(ALLY), Allergan Inc.(AGN), Dollar General Corp.(DG) and Family Dollar Stores Inc.(FDO), while souring on U.S. car makers.
Funds controlled by Carl Icahn took about a 7% stake in Gannett Co. (GCI), and Icahn said in a statement that value could be created by splitting up the company.
Leon Cooperman’s Omega Advisors piled into Apple Inc. (AAPL) and KKR & Co. (KKR.AE)