The Conversation (0)
Seeking Alpha author Brandon Dempster took a look at Vale (NYSE:VALE) and the iron ore outlook, noting that the Brazilian miner is undervalued compared to its counterparts, BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RIO). What does that mean for investors? Overall, Dempster belives the stock hasn’t hit its bottom quite yet.
Seeking Alpha author Brandon Dempster took a look at Vale (NYSE:VALE) and the iron ore outlook, noting that the Brazilian miner is undervalued compared to its counterparts, BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RIO). What does that mean for investors? Overall, Dempster belives the stock hasn’t hit its bottom quite yet.
As quoted in the publication:
Vale (NYSE:VALE) is shaping up to have one of the best risk/reward scenarios on the market; however, the supply and demand equation for iron ore is in a massive imbalance with the amount of capacity that is coming online from Brazil and Australia. The majority stakeholder in the new Roy Hill mine, Gina Rinehart, recently stated, “If we don’t keep our costs down and export competitively, other nations will.” Vale is one of the weakest major iron ore producers whose balance sheet is debt-ridden, and despite having a focus on low-cost production, is facing an increasing amount of headwinds that could cripple it.