CLF

Rio Tinto Says Iron Ore Production Breaks Record; Iron Ore Prices Recover

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On Tuesday, mining giant Rio Tinto (click ticker for report: ) issued impressive third-quarter production results that revealed record production and shipments of Western Australia iron ore thanks to the opening of its Pilbara 290 port and rail expansion (ahead of schedule and significantly under budget). We think this good news has only been sweetened by the recent recovery in iron ore prices, following a near-term bottom in early June. It’s important to note, however, that iron ore prices remain in a defined downtrend, and while we view the recent pricing performance as positive, we’re not celebrating just yet. Image Source: http://www.indexmundi.com/commodities/?commodity=iron-ore&months=60 Still, fundamentals are starting to brighten up just a bit for the mining group. Economic performance in China … Read more

Assets Need to Go: Vale Edition

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Though it has already sold nearly $3 billion in assets since 2012, Brazilian mining giant Vale (click ticker for report: ) is mulling additional asset sales. CEO Murilo Ferreira admitted Tuesday that the firm was considering selling its 40% stake in aluminum producer Norsk Hydro ASA as well as some of its oil and gas assets. Vale joins rivals Rio Tinto (click ticker for report: ), Anglo American, and BHP (click ticker for report: ) in the effort to focus on the best operations while selling off underperforming assets. As we’ve previously noted, this situation becomes difficult when every party is also interested in selling weak assets, as would-be buyers can seek out bargains and demand hefty discounts. The fundamental reasoning … Read more

Rio Tinto Improves Cash Flow in Weak Mining Environment

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Key Takeaways ·         Cost cuts helped Rio Tinto stomach weak commodity end markets. ·         Production increases buffered weak iron ore prices. ·         China remains a key driver of growth. Country data flow continues to contradict. ·         We continue to hold Rio Tinto in our Best Ideas Newsletter portfolio…but we think it could be a wild ride. Best Ideas Newsletter portfolio holding Rio Tinto (click ticker for report: ) announced weak, but better-than-expected, financial performance for the first half of 2013 Thursday. Earnings per share declined 71% year-over-year to $0.93, though revenue declined only 3% year-over-year to $24.5 billion as production increases were able to partially offset commodity price weakness. Underlying earnings per share, which is adjusted for one-time charges, exchange rates, and write-downs, … Read more

Valuentum Dividend Cushion Catches Another: Cliffs Natural Resources!

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After we predicted a dividend cut in November 2012, Cliffs Natural Resources (click ticker for report: ) finally cut its dividend after posting poor results for 2012. The firm slashed its quarterly payout 76% to $0.15 per share. Results for Cliffs were actually a bit better than consensus estimates on both the revenue and earnings side. Total revenue declined 4% year-over-year to $1.5 billion, while earnings dipped 59% year-over-year to $0.62 per share (after adjusting for a $1 billion goodwill impairment). Free cash flow for the year was incredibly weak, falling to a negative $613 million, explaining why the dividend needed to be cut. If we only took into account the payout ratio, Cliffs’ adjusted earnings per share of $3.45 … Read more

Cliffs Natural Resources Dividend Cut on the Horizon

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On Friday, BMO Capital cut its dividend outlook for Cliffs Natural Resources (click ticker for report: ). The iron and coal producer currently yields in excess of 8% at current levels, but we’ve long thought its yield was unsustainable. In our 16-page report on the firm, our investment highlights section includes (see image to the right) that the firm’s dividend doesn’t score very well on the Valuentum Dividend Cushion. We encourage readers that are focused on dividend income to use the Valuentum Dividend Cushion to better safeguard their income portfolio against a potentially devastating dividend cut. Unfortunately, accidental high yielders always seem like a great bargain, but we’ve seen that’s rarely the case. The Valuentum Dividend Cushion has recently predicted cuts at Roundy’s (click … Read more

ICYMI — Video: Will Hasty Policy Facilitate the Next Leg Down, or Do We Have It Coming Anyway?

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President of Investment Research and award-winning author of Value Trap: Theory of Universal Valuation Brian Nelson explains how US policymakers are stuck between a rock and a hard place, and how the market may be factoring in too high of a probability of a return to normalcy before 2021. This and more in the latest video report. Summary Make sure you review Value Trap on Amazon. Do so here. We think those that bought equities near the bottom of this swoon may be looking to take profits at present levels. The market is currently reflecting an 80%-85% probability of a return to normalcy before 2021, which we believe is too high at this time. Our main concern is that government … Read more

Seeking Balance: What’s Happening in the Crude Oil and Iron Ore Markets

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Image Source: Sollven Melindo Commodity prices are notoriously volatile as the global markets often struggle to maintain a sustainable balance of supply-demand. Let’s take a look at some recent developments and coming events that are impacting the prices of crude oil and iron ore. By Kris Rosemann We’re not rushing to add any commodity-based exposure at the moment. We have some of course – but we’re not looking to add more to the newsletter portfolios. For starters, the iron ore pricing market appears to be setting itself up for another period of pain, and we’re preaching serious levels of caution for those considering the space as iron-ore prices have already begun to descend from the peak of the puzzling early-2017 … Read more

Stock Market Outlook for 2021

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By Valuentum Analysts February 8, 2021 2020 was one for the history books. We covered our thoughts and reflections on the past year in our “2020 Won’t Soon Be Forgotten” article (link here), and now we are looking towards the future. Global health authorities should be able to bring an end to the ongoing coronavirus (‘COVID-19’) pandemic sooner than many had expected as several vaccines have already been improved for emergency use and several others appear increasingly likely to get approved. Global vaccine distribution activities are currently underway, and this should allow the world to slowly return to pre-pandemic activities. Before then, immense stimulus measures launched primarily in developed nations should support global economic activities until the public health crisis … Read more