BHP BILLITON

S32 closed at 108p yesterday and is going to open up again this morning. BLT traded down 70p. So immediate value creation.

BLT now trades on more than 25x spot commod prices, with more than 70% exposure to Oil (rally in the price) and Iron Ore (in continued structural decline).

The yield will continue to be cited as a reason not to sell, until it isn’t. The current div requires ongoing cash burn, or continued efficiency exercises that can’t last forever.

After a period of mining outperformance as part of the unwind; dollar weakness, commod strength etc, and the market seemingly finding it’s feet, we think the near term catalyst is out of the way, and it is a good trading short opportunity.