Haven't you noticed the futures, everything is crashing today. While Vale will certainly be involved in today's carnage they have virtually nothing to do with this. China is front and center on their radar screen. As a matter of fact this will probably start to reverse the US dollar which will benefit Vale down the road.
Zacks is a joke, upgrade today, downgrade tomorrow. Vale is a work in progress at the moment. Once the price of I/o stabilizes, and Vale is able to start cutting its debt we should start to see meaningful price appreciation. Until then we are range bound.
A couple of points, which you don't mention.
1. As dismal as things look in Brazil right now recessions do not last forever and as bad as things have gone for Vale (a perfect storm) there certainly are bright spots in its future. A new commodity cycle will happen eventually and the need for iron ore will certainly return to respectable levels at some point.
2. You fail to mention that 2 other once great companies (BHP & Rio) have seen their stock price fall into the hamper as well. Rio at one time was at about a $100 per share and BHP was up around $70. I don't believe the current prices in all 3 of these companies is indicative of where they will be a few years from now.
The price closed at $50.86.
The company is still a work in progress as you know. I don't know when the next commodity cycle will begin, but once it does all these financial institutions will be raising their I/o estimates along with their upgrades on Vale. At this juncture I am more concerned with Brazil getting its act together and begin to come out of this recession. I just hope it can be done. Have a good weekend!
The problems at the moment are these:
1. The price of I/o has not stabilized.
2. Brazil in the worst recession in 100 years.
3. Vale took away its dividend for the time being.
4. The company must show it can generate a profit consistently. Last qtr. was nice, but the previous quarters were horrendous.
5. China, China, China.
6. Vale has to reduce their debt.
Believe me, I want the company to succeed, but right now it is a perfect storm. Good Luck!
There is speculation that Murillo Ferreira will be ousted and a new head at Vale will take over. Since he was a Rousseff appointee do you think it would matter at all for the company? I just hope they don't sell off any major parts of the business before the next commodity cycle comes.
A couple of other things to keep in mind. 1) Brazil is in one of the worst recession's ever, so if they can now implement some policies (now that Dilma is gone)that are pro growth, plus if Vale can start to pay some type of a dividend again at least that will generate some income for shareholders.
Two last points, 1) the debt is huge and must be reduced, they say they are aggressively pursuing asset sales to reduce it by 10 bil next year, 2)they must show that they can steadily make profits, one earnings report doesn't cut it.
I am waiting very patiently (as I am sure you and some others are) for this company to come back. Once I/o stabilizes and that new S11D project comes online (with few hiccups) I think next year we may see $10, lets hope for the best, Good Luck!
Cliffs Natural was upgraded at JP Morgan this morning with a $7 price target and a strong buy rating. Reading between the lines this in the long run means good news for Vale in that if Cliffs is perceived to be at strong buy with a $7 price target then Vale (who is moving in the right direction) will eventually be a much stronger company. Good Luck!
Yes, and more stimulus will come and eventually the tide will turn and another commodity cycle will begin, remember China must house their huge population. They also want you to believe they are moving more toward a technology driven economy, but make no mistake about it the law of supply and demand will eventually right itself.
I am wondering even with the depressed I/o prices if things were better economically in Brazil what the current share price would be if say Brazil were growing at about 3%.
The company is a work in progress. The price of I/o will have to stabilize at some point. Vale also has to show they are reducing their debt, which they said they hope to by 10 billion in 2017. Macquarie just announced the other day that they anticipate problems with the new S11D project, lets hope they are minimal and nothing alarming. I for one hope by next year at the minimum we can get a dividend reinstated, at least with some income being generated for shareholders there will be some interest in the stock, as of right now there is none. Good Luck!
With the recent PMI over 50 many were saying China will probably remain on the sidelines until the end of the year for more stimulus. I think there is a very good case to be made at this point that more stimulus will be coming sooner.
For as horrible as Vale has been today the company is still moving in the right direction and over the long run will be in very good shape, good luck all!
There will be a settlement somewhere down the road, after being tied up in litigation. Don't forget, the Samarco mine is still down. Once they are able to get that up and running again that will produce the monies to take care of the damages. They also have insurance and in the end the price tag will not be anywhere near 44 billion.
BB&T just upgraded Vale to Buy from Hold with a $10 price target, hopefully the worst is behind the company, Good Luck!
Catepillar was just forced to lower earnings again and the CEO now agrees with the banks that the surge we have seen in the metal sector is unsustainable. As long as Vale keeps executing their business model over the long run we should hopefully be fine. Another shot lower of I/o prices is not the end of the world, good luck board!