Why I’m Buying More BHP Billiton Limited (ADR) (BHP)

An interesting side note that I will point out is that one of its mining rivals, Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) has recently decided to join BHP in the oil and gas space as it closed two major acquisitions earlier this year. Those deals really help to stabilize the copper giant’s earnings stream as it shifted earnings from 100% mining related to one that is 25% oil and gas. However, Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) still is nowhere near as diversified as BHP, and doesn’t have the same Asian growth potential. That’s why I’m choosing to add to my BHP position rather than swap out my position for a company like Freeport.

Finally, I’m a big fan of BHP’s move into potash. It has been a long road for the company to get there, as it included an unsuccessful bid for Canada’s Potash Corp./Saskatchewan (USA) (NYSE:POT). Because the deal was squashed by the Canadian government, BHP has decided that if you can’t make them join you, then you can beat them at their own game, which is why it has undergone a major project called the Jansen Project in order to add this important fertilizer to its portfolio mix. Adding Potash Corp./Saskatchewan (USA) (NYSE:POT), which controls 20% of global potash capacity, would have really helped move BHP to the top of the food chain. However, the company can still be a big player, but it will just take a lot more time to get there. It is growth assets like potash, which is a play on the world’s growing population base and middle class, that really give the company an open-ended future.

I look at BHP Billiton as a core holding. The company will benefit from supplying the global economy with the basic materials it needs to grow. Further, it’s strategically positioned to benefit from growth in China and India, while offering upside from both oil and gas as well as potash. That makes the company the most complete global resource player, which is why I want to put some of my excess cash to work, and add to my position in its stock while it’s still on sale.

The article Why I’m Buying More BHP Billiton originally appeared on Fool.com and is written by Matt DiLallo.

Fool contributor Matt DiLallo owns shares of BHP Billiton Limited (ADR). The Motley Fool owns shares of Freeport-McMoRan Copper & Gold.

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