Diversification makes BHP Billiton favourable for investors

As BHP Billiton reports first half results, Helal Miah, investment research analyst at The Share Centre, recommends the miner as a ‘buy' for medium risk investors.
 
"BHP Billiton's first half results reflect the challenging year that 2012 was for most miners,  with revenues down 14% to $32.2bn and underlying earnings before interest and tax down 38% to $9.8bn. These figures were a result of weak demand and subsequent falls in commodity prices, as well as strong currency gains in producer countries, such as the Australian dollar and the Chilean peso.
 
"However, investors will be pleased to hear that BHP Billiton's results compare favourably against other miners, showing the benefits of a more diversified business. Cost cutting programs, divestments and investment programs position the company well for an improved outlook in 2013. Investors should also note that the recent announcement of a new CEO is a natural succession plan, rather than a resignation due to poor performance like several other miners.
 
"We recommend BHP Billiton as a ‘buy' for medium risk investors looking for a balanced investment. The longer term outlook remains robust and its low cost and broad diversification strategy means it is well positioned for the on-going transition in the market."