Why did the Fortescue (ASX:FMG) share price outperform its sector today?

Why did Fortescue shares have a decent day today?
The post Why did the Fortescue (ASX:FMG) share price outperform its sector today? appeared first on The Motley Fool Australia. –

The S&P/ASX 200 Index (ASX: XJO) has actually finished up in the green this Monday, after spending most of the day scaring investors with red ink. The ASX 200 ended up at 7,245 points at market close today, up 0.05%. The Fortescue Metals Group Limited (ASX: FMG) share price did a little better though.

Fortescue shares closed the trading day at $17.15 each, up 0.3%. But that was a pretty decent showing for Fortescue. Why? Because most of its iron ore mining peers fared far worse.

BHP Group Ltd (ASX: BHP), for example, ended up finishing up the trading day down a nasty 1.6% at $39.59 a share. Rio Tinto Limited (ASX: RIO) travelled even worse. Its last trade was at $93.82 a share, down 1.78%.

So why did Fortescue come out on top in a sector that seemed to be targeted for a selloff today?

Fortescue shares defy the share market

Well, one possible cause could be the iron ore price itself. According to Business Insider, iron ore has been on an upward trajectory for the past week. At the start of December, iron ore was being priced at roughly US$95 a tonne. Today, it is commanding US$101.50 a tonne.

But why would that benefit Fortescue and not the other major iron ore miners like BHP and Rio?

Well, Fortescue, unlike its two rivals, is more of a ‘pure’ iron ore miner than the others, despite its recent moves into the hydrogen space.

BHP has extensive operations in oil, coal and copper. Likewise, Rio also is in the business of extracting aluminium, titanium, copper and diamonds.

As such, one could argue that a higher iron ore price benefits Fortescue to a greater degree than the other more diversified ASX 200 miners like BHP and Rio. That might be why we saw the smaller pure-play iron ore miner Champion Iron Ltd (ASX: CIA) also rise today (up 0.45% a $4.43 a share).

Of course, this means Fortescue (and Champion Iron by extention) could be more exposed than the others if the iron ore price falls. But fortunately for investors, that isn’t the case today.

At the current Fortescue share price, this ASX 200 miner has a market capitalisation of $52.8 billion, with a trailing dividend yield of 20.87%

The post Why did the Fortescue (ASX:FMG) share price outperform its sector today? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Fortescue Metals right now?

Before you consider Fortescue Metals, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Fortescue Metals wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Why has the Fortescue (ASX:FMG) share price had such a lousy start to December?

Top brokers name 3 ASX shares to sell next week

5 best ASX 200 resource shares to hold in November

The Fortescue (ASX:FMG) share price hit by broker downgrade

The Fortescue (ASX:FMG) share price jumped 22% in November

Motley Fool contributor Sebastian Bowen 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 Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!