Have you noticed how an earnings headline can distort the real results turned in by companies? Take BHP Billiton
If you looked solely at some of the media reports for BHP's release this week of its annual results, you'd quickly be convinced that, based on the focus on its 62% drop in earnings, the company turned in a stinker of a year. But the crazy commodity environment, its operating accomplishments, and a 5.9% increase in operating cash flow to a new record make it appear both lucky and smart. That's a rare combination these days.
BHP’s luck resulted from its inability to successfully acquire Anglo-Australian rival Rio Tinto
The smart part is attributable to BHP having completed six major projects, despite being forced to operate amid the year's commodities roller coaster. One of the projects was in manganese and the other five were in petroleum. Beyond that, an alumina refinery initiated production in Brazil last month after the fiscal year was completed. And this year, the company will be one-armed-paper-hanger busy with projects in iron ore -- including its joint venture with Rio Tinto -- as well as coal, oil, gas.
I judge BHP’s exposure to energy, especially oil, to be a strength, both now and almost certainly in the future. It's a claim that most of its major competitors, including Rio, Freeport-McMoRan
So given what I believe was a highly successful year for BHP, I suggest that my Foolish friends scoop up a few shares of this big and successful company. That would be a smart move and likely a lucky one as well.