Will BHP Billiton continue to make you money?
 | By Rifka Kats | Macroaxis Story |
Is BHP Billiton valuation justified? Here I will cover the firm prospective on valuation to give you a better outlook on taking a position in this stock. We consider BHP Billiton not too risky. BHP Billiton Limited secures Sharpe Ratio (or Efficiency) of 0.084 which signifies that the organization had 0.084% of return per unit of risk over the last 1 month. Our philosophy towards foreseeing volatility of a stock is to use all available market data together with stock specific technical indicators that cannot be diversified away. We have found twenty-one technical indicators for BHP Billiton Limited which you can use to evaluate future volatility of the firm. Please confirm BHP Billiton Limited Risk Adjusted Performance of 0.0105 and Mean Deviation of 1.58 to double-check if risk estimate we provide are consistent with the epected return of 0.1688%.
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Reviewed by Michael Smolkin
BHP Billiton has accumulated 28.02B in total debt with debt to equity ratio (D/E) of 46.1 indicating BHP Billiton Limited may have difficulties to generate enough cash to satisfy its financial obligations. The firm dividends can provide a clue to current valuation of the stock. The entity one year expected dividend income is about €1.47 per share. Lets now take a look at BHP Billiton Earnings Per Share. According to company disclosure BHP Billiton Limited has Earnings Per Share of 1.39 times. This is 202.17% higher than that of the Basic Materials sector, and significantly higher than that of Industrial Metals & Minerals industry, The Earnings Per Share for all stocks is 39.57% higher than the company. We determine the current worth of BHP Group Limited using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of BHP Group Limited based exclusively on its fundamental and basic technical indicators. By analyzing BHP Group's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of BHP Group's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of BHP Group. We calculate exposure to BHP Group's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to BHP Group's related companies.
BHP Group Limited Investment Alerts
BHP investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring BHP Group Limited performance across your portfolios.Please check all investment alerts for BHPBHP Group Valuation Ratios as Compared to Competition
Our valuation model uses many indicators to compare BHP value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across BHP Group competition to find correlations between indicators driving the intrinsic value of BHP.Breaking it down a bit more
BHP Billiton Limited utilizes its assets nearly 8.6 percent, getting €0.086 for each euro of assets held by the firm. An expanding assets utilization signifies that the company is being more capable with each euro of assets it shows. In plain English assets utilization of BHP Billiton shows how capable it operates for each euro spent on its assets. The modest gains experienced by current holders of BHP Billiton could raise concerns from investors as the firm closed today at a share price of 40.75 on 1.000 in volume. The company directors and management have been quite successful with maneuvering the stock at opportune times to take advantage of all market conditions in December. The stock standard deviation of daily returns for 30 days (very short) investing horizon is currently 2.0084. The current volatility is consistent with the ongoing market swings in December 2018 as well as with BHP Billiton unsystematic, company specific events. BHP Billiton retains net income of 6.63b. BHP Billiton is selling for under 41.70. That is 0.82 percent increase. Started trading at 41.70. Taking everything into account, our analysis show that BHP Billiton Barely shadows market. The firm is fairly valued and projects odds of distress about average for the next 2 years. Our present 'Buy vs. Hold vs. Sell' recommendation on the firm is Cautious Hold.
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This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Rifka Kats do not own shares of BHP Group Limited. Please refer to our Terms of Use for any information regarding our disclosure principles.