Barclays views the stock as the "best vehicle in Latin America to gain exposure to a potential five-year iron ore super cycle." A favorable iron-ore pricing environment will boost the stock, which is expected as Chinese consumption continues to grow.
Vale is a lowest-cost producer, so growth translates favorably to the bottom-line tally. Further, Barclays believes that Vale offers superior product quality, with a high iron to low gangue proportion, and has outstanding "long-reserve-life assets."It views the consensus price scenario for iron as too bearish and the supply scenario as too optimistic.
7. Invesco (IVZ - Get Report) is an asset-management company, which Barclays believes is best positioned to profit from a transition out of fixed-income vehicles and into riskier asset classes in 2011, as Invesco's asset base is nearly 50% in equities or equity-related assets. Barclays sees the operating margin rising from the mid-thirty-percent range to just beneath 40% if it can leverage its retail products into the institutional space and expand its asset base. Barclays' target suggests a potential 35% return in the next 12 months. Other researchers are also bullish. Of those covering the stock, 65%, comprising Goldman Sachs, Credit Suisse and JPMorgan advise purchasing Invesco.