VALE

Vale S.A. - ADR

Industrial/Transportation


Presented:03/18/2021
Price:$17.28
Cap:$88.65B
Current Price:$10.79
Cap:$46.08B

Presented

Date03/18/2021
Price$17.28
Market Cap$88.65B
Ent Value$90.91B
P/E Ratio34.75x
Book Value$6.97
Div Yield0%
Shares O/S5,129.92M
Ave Daily Vol28,899,303
Short IntN/A

Current

Price$10.79
Market Cap$46.08B
Vale SA engages in the production and exportation of iron ore, pellets, manganese, and iron alloys, which are raw materials needed for steelmaking. It operates through the following segments: Ferrous Minerals, Coal and Base Metals. The Ferrous Minerals segment includes the extraction of iron ore and the production of pellets, manganese ore, iron alloys, and coal and logistics services. The Coal segment comprises the extraction of coal and its logistic services. The Base Metals segment involves the production of non-ferrous minerals, which include nickel, copper and aluminium. The company was founded on June 1, 1942 and is headquartered in Rio de Janeiro, Brazil.

Publicly traded companies mentioned herein: Antofagasta (ANTO LN), BHP Group (BHP), Fortescue Metals Group (FMG AU), Glencore (GLEN LN), Southern Copper Corporation (SCCO), Rio Tinto (RIO LN), Vale SA (VALE)

Highlights

The presenter is long shares of Vale SA (VALE), a top iron ore producer based in Brazil with an ~$85B market cap and 5.1B shares outstanding. The company is financial net debt free, but has over $10B in expanded liabilities (e.g. litigation obligations and commitments), which will be reduced to $5B over the next 5 years. At the current price of ~$17 the stock is trading with ~13% FCF yield based on the Street’s 2022 estimate, which is undervalued relative to peers. With a few catalysts coming through, the presenter expects the stock to rerate more in line with peers and reach $25-$30 over the next 3-9 months based on an ~9% FCF yield. 

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