Up by 55%, is it too late to buy Fortescue shares?

It’s always the dilemma when you come across a hot stock that’s rocketed in recent times.

Has the share price already had all its wins? Or is the business outlook still strong enough to produce further gains for investors?

Those who are looking at Fortescue Ltd (ASX: FMG) are in exactly this predicament at the moment.

The share price for the iron ore and green energy miner has soared 41% just in the last three months. If you go back to a trough last May, the return is an amazing 54.5%.

In fact, the S&P/ASX 200 Index (ASX: XJO) stock just hit an all-time high.

So does that mean it’s too late to get in on this action?

Why have Fortescue shares reached an all-time high?

First, let’s explore why investors are going crazy over Fortescue at the moment.

Its quarterly report released earlier this month seems to have a lot to do with the frenzy, according to The Motley Fool’s Sebastian Bowen.

“The company revealed that it shipped 48.7 million tonnes over the period. That brought its shipments for the six months to 31 December to 94.6 million tonnes, the second-highest half-year in Fortescue’s history.

“What’s more, the company was able to achieve average revenue of US$116 per tonne.”

From this point on, the iron ore outlook is even better.

Citigroup Inc (NYSE: C) is forecasting that the global iron ore price could reach a phenomenal US$150 per tonne within the next quarter.

Where to from here?

So that all seems bullish for Fortescue shares.

But — you knew there was a ‘but’ coming — many professional investors think the share price has run too ahead of itself already.

According to CMC Invest, a whopping 10 out of 15 analysts recommend investors cash in their winnings now by selling.

Bell Potter is one of those brokers that are urging clients to sell, citing how the iron ore price could dive dramatically after its imminent peak. 

“We… see low growth in global steel demand and a deteriorating pricing environment,” read its memo. 

“Dividend yield as a price support is coming back into play but we retain our sell recommendation.”

So it seems the answer is that, yes, it is too late to buy Fortescue shares. There are better places to put your money at this time.

The post Up by 55%, is it too late to buy Fortescue shares? appeared first on The Motley Fool Australia.

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More reading

• 3 high-yield ASX shares for considerable passive income (7%-plus dividends!)
• 2 ASX 200 dividend shares to buy in 2024 for dependable passive income
• $30 each? Here’s why the Fortescue share price just hit a new all-time high
• Buying ASX 200 mining shares? Here’s Citi’s 2024 prediction for the iron ore price
• Fortescue share price lifts off amid near-record iron ore shipments

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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