BHP Billiton Limited (ADR) (BHP) Shares Tumble After Dam Disaster in Brazil


After a dam disaster in Brazil has caused at least 13 people to be killed and has left many more missing or injured, someone needs to take the blame. It appears as though BHP Billiton Limited (ADR) (NYSE:BHP) may now be that someone. This is because Brazil has announced that they will sue the mining company as well as some of its partners, including Vale SA.

The lawsuit was scheduled to be filed sometime today, and it will seek approximately $5.2 billion in damages. This money will help in the recovery efforts of the Rio Doce, which is the river that was severely contaminated. As of early this morning, BHP Billiton said that they had yet to receive a formal notice of the lawsuit. In the mean time the news seems to have spooked investors a bit.

The stock is down 3.71% or $1 after the negative news, hitting $25.98 per share. About 134,338 shares traded hands. BHP has declined 47.64% since April 27, 2015 and is downtrending. It has underperformed by 46.75% the S&P500.

Out of 12 analysts covering BHP Billiton Limited (ADR) (NYSE:BHP), 4 rate it “Buy”, 2 “Sell”, while 6 “Hold”. This means 33% are positive. BHP Billiton Limited (ADR) was the topic in 18 analyst reports since July 22, 2015 according to StockzIntelligence Inc. Clarkson Platou downgraded the stock on November 17 to “Neutral” rating. Liberum Capital downgraded the shares of BHP in a report on October 29 to “Sell” rating. Finally, Morgan Stanley upgraded the stock to “Overweight” rating in an October 7 report.

BHP Billiton Limited is a global resources company. The company has a market cap of $66.74 billion. The Firm is engaged in exploration, development, production, processing and marketing of minerals, such as iron ore, metallurgical and energy coal, copper, aluminum, manganese, uranium, nickel, silver and potash. It has 20.26 P/E ratio. It is also engaged in exploration, development, production and marketing of conventional and unconventional gas and oil.