"One of the strongest investment themes is the global commodities supercycle," notes Nick Vardy. He explains, "Now is a good time to pick out potential winners such as Australian mining giant, BHP Billiton Ltd. (NYSE: BHP)." The
The editor of The Global Bull Market Alert says, "I expect BHP Billiton to perform particularly strongly as we move closer to the traditional fourth quarter rally."
For one thing, he notes, BHP's retiring CEO Chip Goodyear reassured investors that the recent financial market turbulence would not hurt BHP's growth -- and that commodity prices would remain strong for some time.
He suggests, "BHP recently had conducted a survey of its major customers around the world to see if their demand for commodities would be dented by the fallout from the U.S. subprime mortgage crisis. The results? The United States was slowing down, but in developing economies such as China and India it's 'essentially business as usual.'
In addition, he suggests, BHP's recent financial results underscore this bullish outlook. Vardy says, "Underlying profit, excluding exceptional items, shot up to $13.68 billion to reach the higher end of market forecasts and rise from $10.15 billion. Revenue for the year climbed 21% to $47.47 billion."
In fact, he notes, BHP has made "so much money in the past few years that it has struggled to spend it." According to vardy, it has returned more than $26 billion to shareholders in dividends and other capital initiatives since 2001 and is half way through its $13 billion share buy-back program. I
In addition, he points out, the company announced it would raise its final dividend by 46% to 27 cents a share. Cardy concludes, "With the benefit of 20/20 hindsight, BHP's current price will look like a terrific entry point."
Each day, Steven Halpern's TheStockAdvisors.com features the latest investment ideas and market commentary from the financial newsletter community.
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