Fortescue (ASX:FMG) shares are on investors’ radar today, here’s why

3 min read | May 13, 2022 12:43 PM AEST | By Sukriti Nair

Fortescue (ASX:FMG) shares are on investors’ radar today, here’s why — Image source: © 2022 Kalkine Media ®

Highlights

Fortescue Metals Group Limited has slightly reversed the previous five days' losses on ASX today.

Influencing factors Iron ore is down 1.7%, and the Australian dollar is slightly lower.

Australian markets are trading higher today with the Materials sector in green.

Australian iron-ore giant Fortescue Metals Group Limited's (ASX:FMG) shares are on investors' radar today (13 May). Since the beginning of the day's trade, FMG's share price has gained around 0.631% to trade at AU$19.13 a share (10:16 AM AEST). In the last five trading days, FMG shares had lost over 6.2%.

What is pushing FMG share price higher today?

Since Fortescue Metals Group Limited is an iron ore producer, its share price is often influenced by iron ore's price movements. The forex rates, AU$ to US$, also seem to impact Fortescue’s business as the company sends a huge chunk of its products out of Australia.

The ASX 200 was up by 1.7% this morning, and the Materials sector to which FMG belongs was also 0.91% higher.

Another factor for positive investor sentiment towards FMG could be the strong operational update it provided recently.

How is Fortescue Metals Group placed operationally?

Fortescue continued its robust operating performance from Q1-22 to Q3-22, with total shipments about 10% higher in comparison to Q3-21. The main reason behind the strong operating performance was its supply chain and the successful integration of Eliwana.

Cash outflows in Q3-22 also included a US$2 billion payment of FY22 interim dividend and capital expenditure of US$830 million, alongside the acquisition cost of Williams Advanced Engineering for US$221 million.

As a result, FMG shifted its FY22 iron ore shipment guidance's upper limit from 185mt to 188mt.

Performance of FMG shares on ASX

FMG's share price has lost almost 16% in the last three months, while they are only 3.6% lower on a YTD basis. The share price had witnessed a notable dip in October and another slight pull-down in March. It has been losing shine for the last five trade days; however, today, again, the shares are om green.

Image Source ^© 2022 Kalkine Media®

While FMG's share price has not performed very well in the recent past, it is still about AU$5.23 above its 52-week low price. The market capitalisation is AU$60.19 billion, and on average, over 9 million FMG shares exchange hands daily. Fortescue also has a high dividend yield of over 15%.

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