BHP is looking very strong financially and is well placed to ride out the recession. They have no debt, and a great history of profitability (5-yr average RoA 19%, avg net margin 25%). This year's profit won't be as good as last year's record, of course, but BHP is in much better shape than its competition to not only survive the recession, but to take advantage of acquisition opportunities that might arise while the competition is struggling to service their debts. When the economy recovers, BHP will emerge significantly stronger relative to its competitors.
Watch for the half-yearly results and dividend declaration coming up on 4 February. Recently, many companies' share prices have jumped significantly up or down depending on how recent results matched expectations. I am bullish on BHP so I'm adding to my holdings in advance of the declaration, in the hope that the results will not disappoint...
$38.36 (01/25/09)
