Why the Fortescue Metals share price just broke the $10 barrier

The Fortescue Metals Group Ltd (ASX: FMG) share price jumped 3% higher to break the $10 barrier and set a new 52-week high on Monday.

| More on:
ASX shares higher

The Fortescue Metals Group Limited (ASX: FMG) share price continued its strong run in 2019 to close 2.98% higher on Monday.

The Aussie miner also broke the $10 per share barrier for the first time in more than a decade yesterday.

Why did the Fortescue Metals share price climb higher?

The Fortescue Metals share price was helped by a relatively strong day for domestic equities to start the week.

The S&P/ASX 200 Index (INDEXASX: XJO) closed 0.24% higher at 6,862.30 points and is just shy of hitting a new all-time high.

Also boosting the group’s shares higher was stronger than expected manufacturing data out of China. The manufacturing Purchasing Managers’ Index (PMI) pushed out to 50.2 compared to the expected 49.5 points on Friday.

That sent the iron ore miner’s shares climbing higher on Monday to break through the $10 per share barrier in yesterday’s trade.

How has the group performed on the ASX this year?

The Fortescue Metals share price is up 141.45% so far this year to be among the ASX 200 top performers.

Fortescue is behind only Afterpay Touch Group Ltd (ASX: APT) and Nanosonics Ltd (ASX: NAN) for capital gains this year. 

The Aussie miner is by far the best ASX Metals & Mining stock this year. For context, Newcrest Mining Limited (ASX: NCM) is the next best by my calculations after climbing 37.72% higher this year.

Should I buy Fortescue shares in December?

The Fortescue Metals share price closed just shy of the $10.04 per share 52-week high it set in yesterday’s trade.

The mining group boasts a $30.85 billion market cap and trades at a price-to-earnings ratio of 6.6 times.

That means for every dollar you receive in earnings from your Fortescue shares, you’re paying just $6.60.

Fortescue’s 4.29% dividend yield also makes it a top ASX 200 dividend stock.

However, the Aussie company is a pure play on iron ore so buying in does depend on your outlook for key commodities in 2020.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended Nanosonics Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on 52-Week Highs