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huxzilla

huxzilla
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  • Vale's Q4 loss more than doubles but core results solid, shares +0.6% AH [View news story]
    Really like $VALE, I wouldn't worry about the near term price, as I am sure it will swing up and down, but this should be a great play 2H14 and beyond.

    Pretty impressive CAPEX reduction, in their last investor presentation they were shooting for $14.6B (not including R&D) and came in at $14.2B (coincidentally NI was $548M).

    In addition, I would suspect that we won't see the impairment issues of the past two years (smart management team taking their losses in lumps). With the impairment losses in 2012 and 2013, DTA's were created, thereby reducing income tax in the future.

    The Brazil tax issue will cost them (crude calculation) around $475M a year going forward. Thus, if they minimize impairments (which is up to management's discretion in the first place), marginally increase revenue, and marginally reduce costs, they will be in a very good place.

    I don't see near term the stock price doing much of anything. Based on the negative and somewhat misleading headlines, your average joe investor will not be buying stock; however, now is the time for a savvy investor to take advantage of lows, and net themselves some gains in rather quick fashion.

    *I am not a CFA, and do own stock in $VALE.
    Feb 27, 2014. 02:18 AM | Likes Like |Link to Comment
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