2. Vale (VALE): Vale, the world's largest producer of iron ore and second-biggest maker of nickel, is a top supplier to the volatile steel industry. Its biggest customer is China.
Last year, steel production declined sharply and sales fell 39% while earnings plummeted to 99 cents per share, from $2.58 in 2008.
But this year analysts are projecting a rebound, including a 63% increase in sales, to $39.8 billion, and earnings of $2.55 per share.Vale's cash flow grew at a compound annual growth rate of 35% from 2002 through 2009, and that pace is continuing this year. Shares have risen 9.7% so far this year, twice that of the mining industry peer group. Its price-to-earnings ratio is 17 versus its peers' 25.9, which suggests that shares are selling at a discount. Analysts' mean share price target over the next 12 months is $39, a 35% premium to its current price, but that will likely change because Vale announced a $2 billion share buyback program last week. Of analysts covering Vale, 21, or 84%, recommend buying its shares and four counsel holding them. None rate Vale "sell."
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV