BHP Analysis

BHP Billiton
BHP Billiton Limited (BHP) is not only one of Australia’s largest companied but one of the world’s largest diversified resources group with a global portfolio of high quality assets. BHP has a well diversified commodity suite that includes minerals, oil, gas and steel.  

The BHP share price over the past 31 weeks is graphically illustrated below


The share price of BHP has been impacted by significant events in the past 6 months, both company related and market related. One of the most influential factors on the BHP share price has been the company’s attempted takeover bids of fellow mining company Rio Tinto. It is potentially the second biggest takeover in history. The first offer was made by BHP in November 2007 and was rejected by Rio Tinto, having a negative impact on the BHP share price. A revised and beefed up offer was then put to Rio Tinto in February 2008, this time the offer, which was a 13% increase on the previous offer and this did little to satisfy investors and BHP's share price was slashed 7.5% in just one day (Australasian Investment Review 2008).

Another negatively impacting influence on the BHP share price, and indeed the entire Australian share market, most particularly in the early stages of 2008 has been the global slowdown and more significantly the fears of a US recession. Whilst the US Sub Prime crisis has had little impact on the Australian Resource sector the concerns about US growth and weakening commodity prices weighed particularly on resource stocks (Glanville 2008).

BHP company’s performance has prevented the stock from suffering significantly even with the negative influences mentioned above. BHP Billiton released its production report for the nine months ended 31 March 2008. Highlights of the report include an increase in year to date production for the 12 commodities reflecting strong track record of consistent growth on the back of projects delivered from previous deep inventory of projects. Products...