Three reasons to like Vale, Bernstein analysts say

|About: Vale S.A. (VALE)|By:, SA News Editor

Vale (VALE) is an attractive mining investment as the cheapest of the three largest global iron ore producers, which include Rio Tinto (RIO) and BHP Billiton (BHP), Bernstein said in a report out today.

Three reasons to like Vale, according to the Bernstein analysts: Shares are cheap at 4x 2014 EBITDA vs. 5.7 for RIO and 6.7 for BHP; pellets likely will gain more traction in the pollution conscious world, and 15% of Vale’s iron ore output is sold as pellets; and Vale's Zambia mine is expected to reach full capacity by 2015, giving the company a foothold in one of the world’s best new frontiers for copper production.

The Bernstein bunch says they prefer Rio as the way to play iron ore, but Vale has leverage to nickel price appreciation.