Shares in BHP Billiton have fallen to their lowest price in 10 years amid the mine disaster in Brazil and slumping commodity prices.
BHP shares dropped to a low of $19.81 on the Australian Securities Exchange on Friday and closed down nearly 2 per cent or $0.38 to $20.23.
Investors are facing their lowest returns on investment from their BHP shares in years amid the end of the mining boom, lower commodity prices and China's economic slowdown.
Fund manager, Roger Montgomery, runs the Montgomery Fund, and thinks the miner is a bad investment.
"The share price today is lower than where it was in 2007, lower than where it was in 2006, and on par with where it was in 2005," Mr Montgomery said.
"Isn't that appalling, after ten years you've not achieved a return that is as good as probably what you could get in a bank," he told PM in an interview.
Since last week's mine disaster in Brazil, BHP shares have lost nearly 15 per cent of their value.
Morningstar senior resources analyst Mathew Hodge said BHP investors face low returns mainly because of the slump in commodity prices.
"In the five years to 2012, their average return on invested capital was 25 per cent, so for every dollar BHP had invested in its assets it was earning 25 cents a year, which is phenomenal," Mr Hodge said.
"And now it's more like two or three per cent so its been a huge turnaround.
Shares in BHP Billiton have fallen to their lowest price in 10 years amid the mine disaster in Brazil and slumping commodity prices.BHP shares dropped to a low of $19.81 on the Australian Securities Exchange on Friday and closed down nearly 2 per cent or $0.38 to $20.23.Investors are facing their lowest returns on investment from their BHP shares in years amid the end of the mining boom, lower commodity prices and China's economic slowdown.Fund manager, Roger Montgomery, runs the Montgomery Fund, and thinks the miner is a bad investment."The share price today is lower than where it was in 2007, lower than where it was in 2006, and on par with where it was in 2005," Mr Montgomery said."Isn't that appalling, after ten years you've not achieved a return that is as good as probably what you could get in a bank," he told PM in an interview.Since last week's mine disaster in Brazil, BHP shares have lost nearly 15 per cent of their value.Morningstar senior resources analyst Mathew Hodge said BHP investors face low returns mainly because of the slump in commodity prices."In the five years to 2012, their average return on invested capital was 25 per cent, so for every dollar BHP had invested in its assets it was earning 25 cents a year, which is phenomenal," Mr Hodge said."And now it's more like two or three per cent so its been a huge turnaround.
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