Why BHP (ASX:BHP) shares have been getting these investors excited

BHP was one of the most popular stocks among Saxo Capital Markets’ clients last month.

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BHP Group Ltd (ASX: BHP) shares were one of the most popular traded stocks amongst Saxo Capital Markets’ Australian clients in August 2021.

Shares in the iron ore major came in at number three, trailing behind Amazon.com, Inc. (NASDAQ: AMZN) and Fortescue Metals Group Limited (ASX: FMG).

What did Saxo say about BHP shares?

August proved to be a challenging month for the BHP share price and broader resources sector.

Besides the company’s FY21 full-year results, BHP made a number of headlines including plans to cease its dual listing on the London Stock Exchange and confirming its merger with Woodside Petroleum Limited (ASX: WPL).

Saxo commented that:

Client attention shifted to BHP Group in mid-August when the global mining giant announced plans to cease its dual listing on the London Stock Exchange and move its entire shares onto the ASX, where 50% of its stock has long been traded.

Looking over at BHP’s FY21 results, Saxo analysts said:

Like FMG, BHP Group posted a 42% rise in profits for the year to the end of June 2021. Much of which was derived by record-breaking profit margins of 64% from its Pilbara-based mines. There was further positivity on the BHP Group share price when it revealed plans to amalgamate its gas and oil assets within Woodside Petroleum, making Woodside one of the ten leading producers of oil and gas in the world. BHP shareholders will also receive shares in the reformed Woodside Petroleum stock.

Popular, but for the wrong reasons

BHP shares tumbled 14.7% in August, largely triggered by a sudden collapse in iron ore prices.

Approximately 196 million BHP shares traded hands in August, with just over a quarter of its monthly volume taking place the days after its FY21 results announcement.

On 18 August, the BHP share price tumbled 7.07% to $47.70 as investors digested its financial performance and outlook for iron ore. The sharp selloff was met with a significant uptick in volume, with ~25.99 million shares trading hands compared to its 20-day moving average volume of just ~6.09 million.

BHP continued to crater the next day, sliding another 6.35% to $44.67. Volume continued to climb with ~26.38 million shares trading hands compared to a 20-day moving average of ~7.17 million.

Foolish Takeaway

BHP’s volume profile is suggestive that investors might have taken reporting season and the recent weakness in iron ore as an opportunity to sell.

August proved to be a very challenging month for BHP shares, as its year-to-date return shrunk from 26.5% at the beginning to a mere 7.5% by the end.

Should you invest $1,000 in BHP right now?

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Amazon. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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