BHP Billiton
BHP Billiton (ASX:BHP) is a global leader in the resources industry.
Formed from a merger between BHP and Billiton, the company is a leader in the extraction and sales of most natural resources, and is particularily strong in Iron Ore, Coking and Thermal Coal, Copper, Zinc, Oil & Gas, Diamonds and most materials key to the production of steel.
Mining stocks outperform Top 50 Aussie stocks
Contrary to popular wisdom, metals and mining stocks have been the best place to have your money invested over the past two months. Take a look at these facts.
The S&P/ASX 300 Metals and Mining index has gained a whopping 47 per cent since November 2008. The Top 50 stocks have risen a more leisurely 14 per cent since November. Even the Small Cap Ordinaries Index out-performed the top 50 stocks, gaining 16 per cent.
During times of economic uncertainty, prevailing wisdom is for many advisers and investors to retreat to "safety" of top 50 stocks. While top 50 stocks generally won't go out of business, in terms of returns to investors, this philosophy hasn't exactly borne fruit in recent months.
Now while this will not always be the case - and mining stock selection is inherently trickier than top 50 investing, it has tipped on its head the notion that a flight to safety of top 50 stocks is always the way to go in a bear market.
Let's look at a few stocks.
BHP Billiton (ASX:BHP) is part of the top 50 stock index as well as a part of the mining and metals index. It has risen 43 per cent since its low point. CBA Bank (ASX:CBA) has gained just 13 per cent, Westfied Group (ASX:WDC) is up just nine per cent and Telstra (ASX:TLS) has gained 13 per cent.
Against that, in the mining and metals arena, Atlas Iron (ASX:AGO) has rocketed 237 per cent, ERA (ASX:ERA) has risen 108 per cent and Mirabela Nickel (ASX:MBN) jumped 151 per cent since the market lows. If stock selection is off in the mining and metals sector an investor will pay. Oz Minerals (ASX:OZL) is currently suspended pending refinancing negotations.
On the whole, having an exposure to the mining and metals sector and buying at the "right" time can be a profitable strategy.
The moral - stockpicking can pay. Timing and price paid are everything.
Other BHP Billiton articles
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04/02/09 BHP Billiton profit rises 57%, dividend up 41%
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28/10/08 Federal Government rail decision opens up Pilbara iron ore
Other BHP Billiton news
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10/06/09 BHP Billiton agrees on 58% cut in coal price
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05/06/09 BHP Billiton and Rio Tinto to combine Western Australian iron ore assets into global colossus
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23/04/09 BHP Billiton finds oil & gas at Puma-4 Well in Gulf of Mexico with BP Plc
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22/04/09 BHP Billiton expects uncertain market conditions to continue
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21/01/09 BHP Billiton supends Ravensthorpe nickel operation, considering options for Yabulu
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18/12/08 BHP Chairman Argus focussed on brown-field expansion
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17/12/08 Has iron ore market bottomed
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03/12/08 BHP Billiton to cut manganese production
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