VALE

Vale S.A.

Industrial/Transportation


Presented:04/09/2015
Price:$6.17
Cap:$29.70B
Current Price:$10.79
Cap:$46.08B

Presented

Date04/09/2015
Price$6.17
Market Cap$29.70B
Ent Value$55.46B
P/E Ratio102.5x
Book Value$9.06
Div Yield6.3%
Shares O/S3,217.19M
Ave Daily Vol28,490,000
Short IntN/A

Current

Price$10.79
Market Cap$46.08B
Vale S.A., together with its subsidiaries, engages in the research, production, and sale of iron ore and pellets, nickel, fertilizer, copper, coal, manganese, ferroalloys, cobalt, platinum group metals, and precious metals in Brazil and internationally. Its Bulk Material segment produces and extracts iron ore and pellet. This segment is also involved in the production and extraction of manganese, ferroalloys, and others ferrous products and services; and extraction of coal, as well as in the provision of railroad, port, and terminal logistics services. The company’s Base Metals segment produces and extracts non-ferrous minerals, including nickel and copper. Its Fertilizers segment provides a group of nutrients, such as potash, phosphates, and nitrogen. The company also invests in energy generation through operating hydroelectric plants and centers, as well as produces steel. The company was formerly known as Companhia Vale do Rio Doce and changed its name to Vale S.A. in May 2009. Vale S.A. was founded in 1942 and is headquartered in Rio de Janeiro, Brazil.

Publicly traded companies mentioned herein: BHP Billiton Ltd (BHP), Fortescue Metals Group Ltd (FMG LN), Rio Tinto PLC (RIO), Vale SA (VALE)

Highlights

The presenter is short shares of Vale SA (VALE) and despite the stock being “on the lows”, he believes there is still substantial downside risk from current levels ($6.00 - $6.20). The supply/demand imbalance in the iron ore market and debt profile of the company - among other issues - continue to be problematic. If his assessment of the company's fundamentals and situation prove to be accurate, "VALE is not a zero, but only because the Brazilian government won't let it fail; the equity will continue to struggle if the company can only generate $8.4 billion of EBITDA over the next two years and debt balloons to $50 billion".

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Idea Discussion

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