BHP down 1% in afternoon trading

After Australia’s largest mining stocks led the S&P/ASX 200 (^AXJO) (ASX: XJO) to its largest 1-day gain in 17 months on Friday, they are again trading in the red, with BHP Billiton (ASX: BHP) amongst those to fall.

Over the last month, BHP – like many other mining companies – has struggled to string gains together over consecutive days. Despite the index having gained 20 points, BHP is trading 1% lower in early afternoon trading, reversing much of its progress made on Friday.

A combination of diminishing international demand and increasing supply of resources, as well as the Australian dollar remaining high, is causing much volatility within the sector, as investors remain unsure what the stock’s next move will be.

As the market begins to accept the industry slow-down, BHP, like Rio Tinto (ASX: RIO), is working towards refreshing its balance sheet and ridding itself of assets that do not fit its core objectives. In turn, it is providing itself with a healthier cash pool and has announced intentions to reward loyal shareholders, as their focus turns to long-term sustainability.

Whilst the market remains volatile however, investors cannot be sure where the turning point will be for this company. Although it is currently trading roughly 35% below where it sat in 2011, it would still be wise to remain on the sidelines with this company and wait for a more attractive entry point. Instead, you could consider buying into other blue chip companies, which have beaten the market over the last 12 months.

The Australian Financial Review says “good quality Australian shares that have a long history of paying dividends are a real alternative to a term deposit.” Get “3 Stocks for the Great Dividend Boom” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading

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

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!