It’s been a big year so far for BHP Group Ltd (ASX: BHP), and its share price.
The company took over the top spot on the ASX in late January, officially becoming the index’s largest entity after it merged with its London-listed twin.
Additionally, commodity prices boosted the company’s profits for the first half of this financial year a whopping 57% higher.
As of Thursday’s close, the BHP share price is $50.06, 18% higher than it was at the start of 2022.
But will the ‘Big Australian’s’ big run continue? SG Hiscock portfolio manager, Hamish Tadgell has weighed in.
Why is this expert bullish on BHP shares?
BHP shares have boomed higher in 2022, but they are still Tadgell’s “preferred large, diversified commodities play”, he told the Australian Financial Review.
The quality of BHP’s business is undoubtable, said the expert. And with commodity prices surging, the company is “having its time in the sun
Over the first half, BHP recorded around US$33.8 billion of revenue and underlying earnings before interest, tax, depreciation, and amortisation (EBTDIA) of US$21.3 billion – respective increases of 27% and 46% on those of the first half of financial year 2021.
Its profit from continuing activities reached US$9.7 billion.
The resources giant’s results were helped along by a 9% increase in its realised iron ore price – which reached US$113.54 per wet metric tonne.
Meanwhile, its realised copper and nickel prices both surged 30%.
Realised coal prices also took off. Those of metallurgical coal, thermal coal, and hard coking coal gained 166%, 210%, and 162% respectively last half.
Additionally, Tadgell compared the mining giant’s post-merger position to that of News Corporation (ASX: NWS) in the 2000s. He said, back then, the media conglomerate “dominated the index”.
Further, worries over BHP’s unification are like some that existed when CSL Limited (ASX: CSL) launched upwards to join other ASX giants, Tadgell said.
Though, an investment in BHP shares isn’t without risk, warned Tadgell.
“It’s a cyclical industry, and things can change, as we have seen with News Corp and CSL over the years,” he said.
The post Why BHP (ASX:BHP) is ‘having its time in the sun’: expert appeared first on The Motley Fool Australia.
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More reading
- ‘Hope for the best and plan for the worst’: BHP boss
- Here’s how these top 3 ASX 200 mining shares performed in February
- Why did the BHP (ASX:BHP) share price deliver such lacklustre gains in February?
- ‘A lot of headroom to grow’: Is 2022 the year ASX investors turn to ESG shares?
- How might the conflict in Ukraine impact the iron ore price?
Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended CSL Ltd. 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 Bruce Jackson.
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