Important Updates for Investors
Carla Pasternak's Premiere Issue of High-Yield International Just
Released
Income expert Carla Pasternak's debut issue of High-Yield
International covers a Taiwanese manufacturer yielding 9.5%... a
rare Mexican monopoly yielding 13.4%... and other top-performing
investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
+15,900% growth might seem far-fetched... but it's not. In fact, it
is mandated by law. And I've identified the ONLY stock positioned to
capture this growth.
The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
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One of the World's Top
Performing Stocks Still has +50% More
Potential |
Published:
July 21, 2008
Companhia Vale Do Rio Doce (NYSE: RIO, $32.08) is more than likely a name you've run
across recently -- and for good reason. Over the past five
years, this mining stock has gone nowhere but up, racking up an amazing
gain of +1,164%. The worst calendar year the shares have seen
lately was in 2005, when they only posted a return of +47%.
Yet, despite that amazing run, the stock still falls
squarely in the middle of growth at a reasonable price (GARP)
territory. Based on projected profits of $3.15 per share, RIO is
trading at 13
times this year's earnings. That's not bad in absolute
terms, but is a steal considering the firm is projected to
deliver earnings growth of +16% annually over the next five
years.
So what is behind all of this? Well, the company is the
world's largest producer of iron ore, a key raw material
used to make steel. And considering most construction
projects require large amounts of
steel, the rapid industrialization of many emerging market
countries is fueling hectic demand for iron ore. That's
particularly true in China, which imports almost as much as the
rest of the world combined.
Like other mining companies, Vale is subject to volatile
commodity prices -- but right now that's a good thing. Recently, one of the firm's competitors negotiated a hefty +97%
increase in iron ore prices with China's largest steelmaker.
This follows a +65% hike that Vale locked up just a few months
ago.
Not surprisingly, management has outlined plans to boost its
annual production by +50% over the next five years, to as much
as 450 million tons per year. And iron ore only accounts for
about half of the firm's earnings. The rest comes from the sale
of industrial metals such as copper and nickel. Overall, this
diversified global mining giant has a presence from Brazil to
South Africa to Australia and will report more than $33 billion
in revenues this year.
Because the firm is the dominant player in a concentrated
market, it wields considerable pricing power. At the same time,
it also enjoys the status of being the low-cost producer. Add
them up, and you'll understand why Vale sports operating margins
north of 45%, versus just 30% for rival Rio Tinto (NYSE: RTP).
With the potential to appreciate +50% based on its discount
to fair
value, Vale is still within reach, despite being one of the
top-performing stocks on the planet in recent years.
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Nathan Slaughter
Editor
Half-Priced Stocks, The ETF Authority
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in-depth guidance on today's leading value opportunities, plus educational guidance, please subscribe to
Nathan Slaughter's premium value investing newsletter --
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Stocks |
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Investing Doesn't Get Any Easier Than This |
Stock picker Amy
Calistri's strategy is as simple as investing gets -- just one idea
a month designed to make money in today's market. Invest this way
and you don't have to worry about oil prices, automaker bailouts, or
what the Fed is up to -- because every "bad" economic development
actually helps some investment or another.Your investing life can
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Go here to learn about Amy's simple investing strategy.
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