Vale Remains Attractive Investment Option

Shares of Companhio Vale do Rio Dolce's [formerly CVRD] (RIO) have risen 1000% on the NYSE in the past five years, but nonetheless remain an attractive option for investors seeking exposure to commodities, BMO Capital Markets said Monday. Analyst Tony Robson initiated coverage on the Brazilian mining giant, which has a market cap of roughly $185-billion, with an “outperform” rating and $45 price target.

He told clients:

For as long as world steel production continues to grow, Vale should be a core holding for global resource investors. The company’s earnings and cash flows are dominated by iron ore and pellets, leaving Vale both vulnerable to, and benefiting from, world steel demand growth.

BMO forecasts strong earnings growth from Vale with net profit of $16.2-billion, or $3.35 per share, expected in 2008, and $21.8-billion, or $4.51 per share, in 2009.

The company’s planned capital expenditure of $59-billion for the next five years should maintain its high growth profiles, Mr. Robson said.

He thinks Vale offers much better value than Rio Tinto (RTP), but labelled BHP Billiton (BHP) the best-priced diversified miner.

Comments

[Italiantrader]

Excellent information... Keep upthe good work
Italian Trader

[dragon52]

Doce, not Dolce...