There are reasons to suggest BHP Billiton Limited's (ASX: BHP) shares could make the climb above $40 in the near future – a feat that has not been achieved since mid-2011. Not bad for a stock that threatened to fall below $30 less than a year ago!
So far this year, the shares have underperformed the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) having climbed just 2c to $38.01. Other iron ore miners like Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) have been in the same boat as a result of a heavy decline in the price of iron ore while investors have also remained cautious regarding economic figures emerging from China.
However, the strengthening nickel price could act as a strong tailwind for the stock and could well boost it above $40 in the coming months. BHP has been trying to divest its nickel assets, such as Nickel West, and the strengthening price should help lure far more attractive bids. The proceeds would likely be put towards a share buyback program which would drive the value of the shares skywards.
An even better bet than BHP
Although shares could just as likely remain volatile over the coming months, I believe investors could certainly find long-term value in buying BHP Billiton today. However, I also believe there are far greater opportunities to take advantage of…
