Is BHP Billiton Limited a buy today?

Mining giant BHP Billiton Limited (ASX:BHP) has fallen sharply, and there could be more pain in store before conditions begin to improve.

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Over the last 12 months, mining giant BHP Billiton Limited (ASX: BHP) has traded between a low of $34.35 and a high of $39.79. It threatened to smash through that high late last month but has instead fallen considerably since it released its full-year results.

One of the primary reasons behind the stock's collapse was its failure to announce a capital return to shareholders. It had been widely expected that (regardless of whether it hit its US$25 billion net debt target) the miner would announce a share buyback program in order to reward shareholders who had remained patient in recent years.

Although the market vented its frustration at the time, it now looks like BHP's decision may have been a wise one considering the plummeting iron ore prices. The commodity recently set itself a fresh five-year low which could heavily impact BHP's margins (and overall earnings) moving forward. Should the iron ore price stabilise around this price (currently US$84.50 a tonne), BHP may be in a better position to deliver capital management in the foreseeable future.

While BHP Billiton remains my pick of the bunch of iron ore miners, given its highly diversified base, I can't help but think its shares could have even further to fall from here. As such, I'll be happy to wait for a more attractive point of entry before I consider hitting the "Buy" button.

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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