Fortescue Metals Group Ltd (ASX: FMG) shares closed 0.2% lower in Tuesday trading yesterday, finishing the day at $19.82 apiece.
That puts shares in the S&P/ASX 200 Index (ASX: XJO) miner down around 3% for the week and about the same for 2023 so far.
That's the latest price action.
Now, here are two reasons to buy Fortescue shares today and two reasons to wait.
Buy or wait on this ASX 200 mining stock?
Senior wealth manager at Sequoia Wealth Management Peter Day has a sell recommendation for Fortescue shares.
But he does offer two compelling reasons for ASX 200 investors to consider the stock.
According to Day (courtesy of The Bull):
The iron ore division has tailwinds with strong production and cost performance expected over the remainder of fiscal year 2023. Also, the Iron Bridge Magnetite project is ramping up.
But Day is cautious about the retrace in the iron ore price and the outlook moving forward, which is a reason to hold off on Fortescue for now.
"However, recent iron ore price weakness has driven downside risk to our forecasts in a spot price scenario," he said.
There's another reason not to buy the miner today, according to Day. "The scope of projects remains a headwind to shareholder returns, in our opinion."
However, investment advisor at Seneca Financial Solutions Tony Langford notes Fortescue's strong Q3 results:
The iron ore producer shipped 46.3 million tonnes of iron ore in the third quarter of fiscal year 2023. It contributed to record shipments of 143.1 million tonnes for the nine months to March 31, 2023, up 3% on the prior corresponding period.
But Langford also has a sell recommendation on Fortescue shares.
Like Day, he's concerned about the iron ore price.
"Recently, the iron ore price has been under pressure, and this may continue," he said.
But he offers a second reason not to buy the miner's stock today.
"Also, we believe FMG is trading at a premium, so investors may find better value in BHP Group and Rio Tinto."
How have Fortescue shares been tracking?
Fortescue shares are trading right about where they were 12 months ago, excluding the $1.96 in dividends the miner has paid out.
