Are you a novice, a basher in disguise?
At any given time there are people that believe that all of the bad news are already in the stock and those that have money to spare buy a position expecting a recovery in a year or so. A study of historical valuation of VALE indicates that the stock is the cheapest it has been in over a decade. Some people average down, some average up. Those that buy the stock believe that the reasons to sell the stock given by the likes of cash.mccall are exaggerated half-truths.
This guy cash.mccall is a pompous nincompoop. Apparently, he is an option trader who thinks that he can influence the stock direction by posting contrived half-truths.
The tangible book value of Oclaro is $1.7 and it is dropping by about $0.14 per quarter due to ongoing losses. Oclaro has become a one-trick pony in a cutthroat industry. In a merger, Oclaro might still fetch $3-$4 provided that it occurs soon.
1. The book value given by Yahoo is wrong. It does not subtract the large equity of the preferred shares that Vale has. The actual book value is short of $7, and the tangible book value is short of $5.
2. The PE given by Yahoo is also wrong because it assumes $90 price for iron in 2015. It will likely be $60-$70.
3. Vale just had a change in management. Its iron chief was replaced by its more capable based-metal chief.
4. VALE should be accumulated for a likely recovery in late 2015.
Stupid comparison to coke. Coke is a branded beverage, not a commodity. Anyhow, the price of a bottle of coke 9 years ago was $0.75 to $1.
Iron prices are not cheap as dirt. Just 9 years ago, the price was about $33 (compensated for inflation). The price can easily go down to $60. However, a well-managed Vale should be nicely profitable even at $60 iron. Vale just replaced its iron chief with its base-metal chief who had managed rather well the Vale's base metals production.
SINGAPORE, Nov 18 (Reuters) - Chinese iron ore and steel futures tumbled to record lows on Tuesday after data showed a deepening decline in China's home prices, the latest evidence of economic weakness in the top consumer of both commodities.
China's home prices fell an annual 2.6 percent in October despite a range of government support measures. It was the steepest year-on-year fall since Reuters started calculating nationwide prices in 2011.
The losses in futures could stretch iron ore's rout. The steelmaking ingredient is at its weakest since 2009 and has fallen 44 percent this year as big, low-cost miners such as Rio Tinto, BHP Billiton and Vale boosted output amid slowing demand growth in top importer China.
Iron ore for May delivery on the Dalian Commodity Exchange fell 3.9 percent to close at its downside limit of 487 yuan ($80) a tonne, its weakest since the bourse launched iron ore futures in October 2013.
The benchmark spot iron ore price .IO62-CNI=SI dropped 0.5 percent to $75.10 a tonne on Monday, the lowest level since June 2009, according to data compiled by The Steel Index.
The following have now reappeared but without reports:
Craig-Hallum Capital Group
Roth Capital Partners
The transaction is valued at $78.62 per Baker Hughes Inc. share, a 31 percent premium to its Friday closing price of $59.89. Baker Hughes shareholders will receive 1.12 Halliburton shares plus $19.00 in cash for each share they own.
The deal will close in the second half of 2015. Because there is not 100% assurance that the deal will materialize, BHI will trade with a (diminishing) discount until the actual takeover. Because the deal is payable mostly in HAL stock, BHI will follow the market price of HAL.
Read a Credit Suisse call from Oct 2011:
October 4, 2011 (Boston) – An international bank boosted its forecast for gold for the remainder of 2011 and next year, pointing to anticipations of continued macroeconomic weaknesses, low interest rates and additional purchases from central banks, according to Dow Jones Newswires.
The gold forecast for Credit Suisse for 2012 gained 19 percent to $1,850 per troy ounce while the 2011 gold forecast grew 5 percent to $1,575 per troy ounce. A "sufficiently large" investment demand will push gold north of $2,000 per troy ounce during the third and fourth quarters of next year and the record high price of $2,200 per troy ounce next year is within reach.
"Our previous gold forecasts were bullish but not bullish enough," states a research note from the bank.
Most factors supporting gold's upward drive in value are likely to remain during the foreseeable future, according to the bank.
Gold futures were dropping in value on Tuesday, which Reuters attributed to investors' caution about the precious metal's volatility last month after establishing a record high price of $1,923.70 on September 6.
BHI shareholders will not be paid in cash but with newly issued HAL shares replacing the existing BHI shares. The conversion rate is not yet known.
HAL has too little cash and it has significant debt so it will not pay cash. This will be a merger. The shares of BHI will be retired and will be replaced with newly issued shares of HAL worth at most about $65/sh in today's market. It does not matter what was the price of BHI a couple of months ago. The price of HAL was also much higher than today.
TheStreet's ratings are of no value. VALE moves with the iron ore prices. Its poor financial management (e.g. the massive loss on foreign currency hedging last quarter) does not help. The reversal will be when iron prices stabilize. Google the following 'Iron Ore Mine Closures May Lead to $70 Floor Price, ANZ Says'. If VALE's cash flow stays negative, the stock might approach its book value which is below $7. (The book value given by Yahoo is based on the total shareholder equity. However, it includes VALE's large preferred shares equity which should be subtracted for calculating the book value of the common shares.)
CLF wiped out its book value of $32 down to $0.2. CLF is hardly profitable and it is debt- laden. CLF is a special situation, and an eventual bankruptcy is a reasonable scenario for it.
Why wouldn't Citigroup update its previous $12.5 price target for VALE?
"Citi analysts led by Alex Hacking downgraded their recommendation on Vale shares to sell from neutral in a research note today. The bank’s global commodity team reduced its forecast for iron-ore prices in 2015 and 2016 by 19 percent to $65 per ton. The Rio de Janeiro-based company is expected to generate $7.5 billion in operating cash flow next year, insufficient to cover planned investments, they said.
“Vale’s shares are at multi year lows but we see little chance for the stock to outperform if this iron-ore price forecast is accurate,” the analysts wrote in the note sent to clients. “We would expect Vale to defer maintenance capex, sell more assets and increase net debt.”
Today Harmonic announced a strategic investment in Cloud Technology. It made "significant investments" in Encoding, the world`s largest video transcoding service, and VJU, one of the first companies to provide cloud-enabled playout solutions to the broadcast and pay-TV industries.
Noticeably, the announcement opened with "Harmonic (HLIT) is the worldwide leader in video delivery infrastructure for emerging television and video services" rather than the previous all-encompassing "Harmonic (HLIT), the worldwide leader in video delivery infrastructure". Supposedly, Harmonic now claims cloud-based video delivery leadership.
Because of the announced investments, apparently financed from the cash on hand, share repurchasing will be curtailed or ceased.