Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

<ul>
<li>We like <a href="https://www.smartkarma.com/entities/vale-sa" target="_blank" data-smartkarma-citation="entities:23731:1" rel="noopener">Vale (VALE US)</a> for its exposure to high-grade iron ore (95% of EBITDA) and capital return discipline, with a current dividend yield of 8% and 3.5x EV-EBITDA. </li>
<li>The cash flows from the iron ore business could be used to invest in base metals, such as copper, nickel, etc., to enhance the portfolio. </li>
<li>The key risk remains the overhang from the Mariana Dam disaster being settled for  ~25.7 billion USD (vs. the current market cap of 50 billion USD). </li>
</ul>


We like Vale (VALE US) for its exposure to high-grade iron ore (95% of EBITDA) and capital return discipline, with a current dividend yield of 8% and 3.5x EV-EBITDA. 
The cash flows from the iron ore business could be used to invest in base metals, such as copper, nickel, etc., to enhance the portfolio. 
The key risk remains the overhang from the Mariana Dam disaster being settled for  ~25.7 billion USD (vs. the current market cap of 50 billion USD). 


VALE US: Exposure to High-Grade Iron Ore With >8% Dividend Yield

<ul>
<li>We initiated on the iron ore space recently with a short-term bullish call (see: <a href="https://www.smartkarma.com/insights/iron-ore-primer-understanding-the-drivers-of-the-market-ways-to-play-the-sector" target="_blank" data-smartkarma-citation="insights:136452" rel="noopener">Iron Ore Primer: Understanding The Drivers Of the Market, Ways To Play The Sector</a>). </li>
<li>Check out our initiation on  <a href="https://www.smartkarma.com/insights/mount-gibson-mgx-au-iron-ore-pure-play-77-of-the-mkt-cap-in-cash-0-5x-ev-ebitda-with-catalysts" target="_blank" data-smartkarma-citation="insights:136941" rel="noopener">Mount Gibson (MGX AU): Iron Ore Pure Play, 77% of the Mkt Cap in Cash, 0.5x EV-EBITDA With Catalysts</a> ).</li>
<li>Iron ore has a more short-term upside as it bounces off the cost curve in its three-year band (95-130 USD/ton), while China has demonstrated an abundant appetite for restocking. </li>
</ul>


We initiated on the iron ore space recently with a short-term bullish call (see: Iron Ore Primer: Understanding The Drivers Of the Market, Ways To Play The Sector). 
Check out our initiation on  Mount Gibson (MGX AU): Iron Ore Pure Play, 77% of the Mkt Cap in Cash, 0.5x EV-EBITDA With Catalysts ).
Iron ore has a more short-term upside as it bounces off the cost curve in its three-year band (95-130 USD/ton), while China has demonstrated an abundant appetite for restocking. 


Iron Ore Comes Roaring Back! BHP-Anglo, VALE, FMG: What's Hot In the Space

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>Vale S.A.’s first-quarter 2025 earnings report offers a nuanced view of its performance amid dynamic market conditions and strategic initiatives.</li><li>Starting with an increase in iron ore sales by 4% year-on-year to 66 million tons, the company effectively managed its integrated supply chain despite a 4% decrease in production caused by higher rainfall in critical mining regions.</li><li>Vale continues to focus on operational excellence, as evidenced by the S11D project achieving its highest production for the first quarter, driven by asset reliability improvements.</li></ul>

Vale S.A.’s first-quarter 2025 earnings report offers a nuanced view of its performance amid dynamic market conditions and strategic initiatives.Starting with an increase in iron ore sales by 4% year-on-year to 66 million tons, the company effectively managed its integrated supply chain despite a 4% decrease in production caused by higher rainfall in critical mining regions.Vale continues to focus on operational excellence, as evidenced by the S11D project achieving its highest production for the first quarter, driven by asset reliability improvements.

Vale S.A.: Nickel and Base Metals Optimization to Sustain Long-Term Profitability Across Its Nickel Operations!

<ul><li>Vale S.A.'s third quarter 2024 results present a mixed picture, with notable progress and some ongoing challenges.</li><li>New CEO Gustavo Pimenta highlighted the company's strategic vision, focusing on operational efficiencies, portfolio enhancements, and stakeholder trust.</li><li>These pillars aim to drive Vale back to a competitive position, emphasizing safety, cost efficiency, and quality.</li></ul>

Vale S.A.'s third quarter 2024 results present a mixed picture, with notable progress and some ongoing challenges.New CEO Gustavo Pimenta highlighted the company's strategic vision, focusing on operational efficiencies, portfolio enhancements, and stakeholder trust.These pillars aim to drive Vale back to a competitive position, emphasizing safety, cost efficiency, and quality.

Vale S.A.: Cost Reduction & Efficiency in Iron Ore Production Driving Our Bullishness! - Major Drivers

<ul>
<li>We expect iron ore to remain rangebound between 90 and 110 USD/ton in FY25, which is in line with the band it has maintained over the past six months. </li>
<li>Iron ore players like <a href="https://www.smartkarma.com/entities/vale-sa" target="_blank" rel="noopener">Vale (VALE US)</a> and <a href="https://www.smartkarma.com/entities/fortescue-metals-group-ltd" target="_blank" rel="noopener">Fortescue Metals (FMG AU)</a> can maintain high single-digit dividend yields at USD 100/ton. We see short-term opportunities in these names.</li>
<li>For small-cap specialists, check out our research on <a href="https://www.smartkarma.com/insights/fenix-resources-fex-au-positive-developments-at-iron-ridge-and-other-catalysts" target="_blank" rel="noopener">Fenix Resources (FEX AU): Positive Developments At Iron Ridge And Other Catalysts.</a> The company (trailing 5x PE) is poised to triple its production.</li>
</ul>


We expect iron ore to remain rangebound between 90 and 110 USD/ton in FY25, which is in line with the band it has maintained over the past six months. 
Iron ore players like Vale (VALE US) and Fortescue Metals (FMG AU) can maintain high single-digit dividend yields at USD 100/ton. We see short-term opportunities in these names.
For small-cap specialists, check out our research on Fenix Resources (FEX AU): Positive Developments At Iron Ridge And Other Catalysts. The company (trailing 5x PE) is poised to triple its production.


Iron Ore Tracker (6-Jan-2025): What Does the New Year Hold in Store For Iron Ore

Brazil

Vale S.A. produces and sells iron ore, pellets, manganese, alloys, gold, nickel, copper, kaolin, bauxite, alumina, aluminum, and potash. The Company is based in Brazil, where it owns and operates railroads and maritime terminals.

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Vale (VALE US)

VALE US: Exposure to High-Grade Iron Ore With >8% Dividend Yield

We initiate coverage on VALE US, one of the world's biggest iron ore producers, with high-grade iron ore and low-cost production. The stock trades...

Sameer Taneja

Iron Ore Comes Roaring Back! BHP-Anglo, VALE, FMG: What's Hot In the Space

We summarize newsflow in the iron ore market and our take on the BHP-Anglo deal. We also summarize the production reports of Vale/FMG and Champion...

Sameer Taneja

Vale S.A.: Nickel and Base Metals Optimization to Sustain Long-Term Profitability Across Its Nickel Operations!

Vale S.A.’s first-quarter 2025 earnings report offers a nuanced view of its performance amid dynamic market conditions and strategic...

Baptista Research

Vale S.A.: Cost Reduction & Efficiency in Iron Ore Production Driving Our Bullishness! - Major Drivers

Vale S.A.'s third quarter 2024 results present a mixed picture, with notable progress and some ongoing challenges. New CEO Gustavo Pimenta...

Baptista Research

Iron Ore Tracker (6-Jan-2025): What Does the New Year Hold in Store For Iron Ore

We summarize our estimates for iron ore pricing in CY25. We also provide some interesting equity/options-related opportunities for market...

Sameer Taneja

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