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Here’s why Fortescue Metals Group Limited is flying today

After months of despair, shares in Fortescue Metals Group Limited (ASX: FMG) are today the second-best performing stock on the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO).

Fortescue, which is Australia’s third largest iron ore miner, has regained 21c or 5.22% with its shares now trading at $4.23 after the iron ore price staged a minor recovery overnight. The commodity recently sank below US$90 for the first time since 2012, however, it once again climbed above that level last night, helping to regain some confidence in the sector.

Despite today’s gain, the stock has still fallen more than 28% since the beginning of the year, and investors shouldn’t take it as a sign of good things to come. In my opinion, iron ore will continue to drop in price over the coming 12 months and could drag Fortescue further down with it.

With some analysts suggesting Fortescue might only be making a US$15 profit per tonne produced at these prices, I wouldn’t want to be holding the stock should iron ore fall any further.

If you really want exposure to the iron ore sector while confidence in the market is low, BHP Billiton Limited (ASX: BHP) or Rio Tinto Limited (ASX: RIO) would be much safer bets than Fortescue.

However, even they aren’t the best places for your hard-earned investment dollars today…

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

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