Is Vale SA (VALE) Stock A Buy? 2022 Fundamental Analysis – Investing in Vale. In this video, we look at Vale’s Fundamentals. We review VALE’s Business, Key Ratios, and perform a Discounted Cash Flow (DCF) analysis to find the intrinsic value. We review Key Ratios such as Revenue, Net Income, Shares outstanding, Dividends, Payout Ratio, Free Cash Flows (FCF), Financial Leverage, Current Ratio, Debt to Equity Ratio, Return on Equity (ROE), etc. We also compare Vale’s current valuation to that of S&P 500.
Timestamp
0:00 Introduction
0:24 Business Overview
4:09 Key Ratios Analysis
14:17 Discounted Cash Flow Analysis / Intrinsic Value
16:53 Conclusion
Vale S.A., together with its subsidiaries, produces and sells iron ore and iron ore pellets for use as raw materials in steelmaking in Brazil and internationally. The company operates through Ferrous Minerals and Base Metals segments. The Ferrous Minerals segment produces and extracts iron ore and pellets, manganese, ferroalloys, and other ferrous products; and provides related logistic services. The Base Metals segment produces and extracts nickel and its by-products, such as gold, silver, cobalt, precious metals, and others, as well as copper. The company was formerly known as Companhia Vale do Rio Doce and changed its name to Vale S.A. in May 2009. Vale S.A. was founded in 1942 and is headquartered in Rio de Janeiro, Brazil. (Source: Yahoo Finance)
Vale’s Website: http://www.vale.com/en/investors/pages/default.aspx
Vale’s Key Statistics: https://www.morningstar.com/stocks/xnys/vale/trailing-returns
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3 Comments
I want to know why institutional ownership is only ~30%. Not a very good sign. Thanks for a very analytical video.
Typically stocks where ownership is in the hands of a few, it trades at a discount. If you took the Proven and Probable Reserves' of Vale: Nickel, Iron Ore, Coal and Copper the Undiscounted Value of the Reserves at today's prices is $1.6 Trillion. Today's Market Cap is $77 Billion and generates an Annual EBITDA of $21 Billion. So if you bot the company for $77 Billion, ignoring repayment of $15 Billion in Debt, your investment would pay back in 3.7 years and still have $500 Billion (40% margin) of cash flow left to deliver on basically ZERO investment. Setting aside the weak Management. Discounted Cash Flow Analysis is a weak tool, you must look at the value of the assets. And, by the way, VALE has spent $73 Billion to generate the $21 Billion in EBITDA so to start from scratch in building these assets would take years and even more money.
Very good analysis. How do you calculate DPCF? Thanks