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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (51873)	3/10/2014 11:16:11 PM
From: Spekulatius	1 Recommendation Recommended By Mattyice Respond to of 78666

Adding some VALE @ 12.73$. I think the market is overreacting to the downdraft in iron ore spot prices. Those have fluctuated quite a bit, but seem to have bounced back. VALE actually had pretty good results recently, and as they have started to rationalize their operations, cut costs and reduced Capex, the FCF looks much better. The balance sheet does not show it yet, since they had pay taxes for foreign earnings for several years, but that unpleasant episode is now finally behind them. It should also be noted that VALE's management believes, that below 110$/ton, a lot of iron ore mining operations in China will become uneconomical and close if those operation, would support pricing. I am not sure that this is entirely correct, but below tangible book and with world class and low cost operations (cash cost ~25$/ton), I do not see how they could go broke: seekingalpha.com