Dear PGM-Capital, blog reader,
Brazilian Iron Ore miner, “Vale SA” (NYSE: VALE) which is by volume world biggest Iron ore miner, in 2008 concluded that in order for it maximize profit, it need to own and operate its own fleet of “Very Large Ore Carriers” (VLOC).
Due to this In 2008 the company, placed orders for twelve 400,000-ton Valemax ships to be constructed in China and ordered seven more ships from Daewoo Shipbuilding & Marine Engineering in South Koreain 2009. The first Valemax “Vale Brasil” was delivered mid 2011 and currently Vale SA has 35 ships under construction to be delivered in 2013.
Today, December 29th 2011, Vale took a significant step towards its goal of controlling all its shipping to China after it was confirmed that one of its giant new Valemax ships had been allowed to dock in the country for the first time.
Based on the above and with a P/E ratio, P/B ratio based on today closing price of respectively 5.28 and 1.44 and a quick ratio of 1.8 we have a STRONG BUY rating on the stock.
Last but not least, before following any investing advice, always take your investment horizon and risk tolerance into consideration and keep in mind that the price of Commodities, as well as the stocks of their producers can be very volatile and that sharp corrections might happen in the short term.
Yours sincerely
Eric Panneflek
Chairman