4-Star Stocks Poised to Pop: Vale
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Brazilian mining giant Vale (NYS: VALE) has earned a respected four-star ranking.
With that in mind, let's take a closer look at Vale's business and see what CAPS investors are saying about the stock right now.
Vale facts
Headquarters (Founded) | Rio de Janeiro (1942) |
Market Cap | $138.7 billion |
Industry | Industrial metals and minerals |
Trailing-12-Month Revenue | $62.52 billion |
Management | CEO Murilo Ferreira (since May 2011) CFO Guilherme Cavalcanti (since September 2005) |
Return on Equity (Average, Past 3 Years) | 22.3% |
Cash/Debt | $13.9 billion / $27 billion |
Dividend Yield | 1.8% |
Competitors | BHP Billiton (NYS: BHP) Rio Tinto (NYS: RIO) |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 98% of the 6,586 members who have rated Vale believe the stock will outperform the S&P 500 going forward. These bulls include All-Star sandvig, who is ranked in the top 0.5% of our community, and KnockoutMouse.
Just last week, sandvig brought Vale's attractive metrics to our community's attention:
Even if there is a slowdown in the global economy, over time there will continue to be a need for iron ore.
Current P/E < 6.
Current P/cash flow < 5.
5 year sales growth > 18%
ROI > 23%.
This looks pretty good to me.
In fact, Vale currently sports a paltry price-to-cash flow of 3.1. That represents a clear discount to other miners like BHP (9.2), Rio Tinto (6.3), and Southern Copper (NYS: SCCO) (14.6).
CAPS member KnockoutMouse also lists several of Vale's positives:
1. A clear leader in an industry with high barriers to competition.
2. Well managed and efficient: with a high ROIC and profit margin.
3. Strong balance sheet, free cash flow adequate to fund its dividend, and well managed debt.
4. A history of substantial dividends and dividend growth.
Vale is a dual play: a major iron ore supplier to the emerging markets, and a new player in potash fertilizer market and the tightening food supply problem.
What do you think about Vale, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
Interested in another easy way to track Vale?Add it to your watchlist.
At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
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