BHP Group Ltd (ASX: BHP) shares have struggled in recent months. The Aussie iron ore giant has seen its value drop 20.8% on the ASX in the past month to a $199.7 billion market capitalisation.
Investors might be alarmed to see such a huge drop in value from an ASX large cap. The good news is, however, there's more to the recent share price declines than meets the eye.
Why BHP shares are down 20% in the past month
It has been a busy time for BHP recently. There was the group's August full-year earnings result followed up by the merger announcement with Woodside Petroleum Limited (ASX: WPL).
Woodside will merge with BHP's petroleum division to create a global top 10 independent energy company by production. The news was big for both Woodside and BHP, but it doesn't necessarily explain the recent decline in BHP shares.
Rio Tinto Limited (ASX: RIO) shares are down 10.9% in the past month while Fortescue Metals Group Limited (ASX: FMG) shares have slumped 26.3%. Tumbling iron ore prices amid changing market conditions in China has certainly hurt the large Aussie miners.
There is also the recent changes announced in the August results regarding organisational restructure. BHP is planning to drop its dual listing in the UK on the London Stock Exchange as part of the changes.
The subsequent sell-down from UK funds on the back of the news has therefore made the BHP UK price plummet. That price drop may also have had a knock-on effect for the Aussie listing as investors recalibrate amid the UK valuation changes.
That means that while the BHP share price has tumbled in the past month, it may not be as simple as Rio Tinto being "the better pick". It's a busy period for the Aussie iron ore miner right now and that means identifying what's driving valuation changes is difficult for even the best investors.
