Fortescue Metals Group Limited (ASX: FMG) shares have topped Saxo Capital Markets' most popular traded stocks among its Australian clients in August 2021.
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What did Saxo say about Fortescue shares?
Fortescue emerged as the "undisputed number-one stock" Saxo clients wished to trade in August.
At the beginning of August, Fortescue's 20-day average volume was around 6.4 million shares.
By the end of the month, its 20-day average volume had climbed to 10.5 million shares.
This might come as no surprise following the company's FY21 full-year results, final fully-franked dividend of $2.11 per share and recent volatility in iron ore prices.
Commenting on Fortescue shares, Saxo Markets sales trader Junvum Kim believes, "the short-to-medium term outlook for Fortescue could hinge on its investment in its Iron Bridge magnetite development, as well as its renewed focus on greener iron ore supplies."
Kim commented that:
For FMG, its trading volume surged as it announced record annual profit that more than doubled (AU$10.3b vs $4.7b) and highest ever final dividend (AU$2.11 vs $1) implying 17% yield on the back of the strong iron ore prices despite the recent correction during August when iron ore price fell 30%.
He reiterated the potential impact Iron Bridge might have on Fortescue shares, saying:
While FMG forecasted fiscal 2022 iron ore shipments in the range of 180 to 185 million tons, risk and the performance is expected to be subject to its Iron Bridge magnetite development that could cost $1b more than its initial estimate taking the total hit up to $3.5b. This CAPEX is a key for improvements in the overall quality of the ore but a number of factors including material costs, labour shortages and exchange rates could continue to be volatile heading into the first production date December 2022.
Renewables has been a major investment theme this year, and Kim highlights Fortescue's ambitions to produce green iron ore at scale.
FMG declared it would be the world's first major supplier of green iron ore focusing on emission reduction to diversify into renewable energy and green hydrogen through its unit Fortescue Future Industries (FFI). It set aside $10% of the earnings for FFI to target a supply of 15 million tonnes of green hydrogen a year by 2030.
