FMG recently confirmed that it is on track to hit the top end of its iron ore export guidance, and possibly exceed it, whilst at the same time continue to cut costs.

The company also took its unit costs below $US13 per tonne for the first time in the December quarter, with an average “C1” cost of $US12.54 per wet metric tonne.

Fortescue has now lowered its cost for a 12th consecutive quarter.

The company managed to pay down another $US1 billion of debt in the past quarter and said it held $US1.2 billion in cash at the end of December, while net debt stood at $US4 billion.

After reporting another strong quarter of shipments and cost cuts, chief executive Nev Power said shareholders could be in line for better returns.

“We need to continue diverting most of our cash flow to repaying debt. But we will progressively look to increase returns to shareholders,” he told reporters.

The company declared a 12 cents per share final dividend in August, exceeding analyst expectations. It will declare its next interim dividend on February 22.

These are obviously all positives for a company that continues to deliver on its guidance, cut costs and pay down debt, and we believe that market will continue to reward FMG by bidding up its shares.

Technically, the stock is in a fairly well defined uptrend, where momentum is strong but not currently overdone.

Targets are towards $8.

The post Shares to buy: Fortescue Metals Group (FMG) appeared first on Australian Stock Report.