If your company produces significant quantities of iron, you've had a
tough year in the stock market. If your company only produces iron,
it's been a pretty ugly year. Diversification has helped Rio Tinto (NYSE:RIO), BHP Billiton (NYSE:BHP), and Anglo American (OTCPK:AAUKY), but Vale (NYSE:VALE) and Fortescue (OTCQX:FSUGY)
have seen their shares weaken significantly (down about 19% over the
past twelve months) as iron prices continue to test predictions of just
how low prices can fall before finding a floor.
It's dangerous to
assume that commodity prices can't continue to fall once they've crossed
the threshold where many/most producers operate at a loss (ask
investors in met coal or uranium mining companies), but Vale is one of
the rare iron ore miners that can still make money at current prices.
With low prices starting to lead to production cutbacks and deferred
mine expansion plans in various parts of the world, maybe this is a time
to consider Vale shares. Brazil's election cycle still represents a
risk, as does China's economy and the significant amount of low-cost
iron supply available in Australia, but these shares do seem to hold
some upside here.
Please read the full article here:
Is It Time To Bottom-Fish For Vale SA?
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