Post-Market Laggard: Vale (VALE)

Trade-Ideas LLC identified Vale (VALE) as a post-market laggard candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Vale

(

VALE

) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Vale as such a stock due to the following factors:

  • VALE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $70.0 million.
  • VALE is down 5.1% today from today's close.

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More details on VALE:

Vale S.A., together with its subsidiaries, engages in the research, production, and sale of iron ore and pellets, nickel, fertilizer, copper, coal, manganese, ferroalloys, cobalt, platinum group metals, and precious metals in Brazil and internationally. The stock currently has a dividend yield of 2.4%. VALE has a PE ratio of 3. Currently there are 2 analysts that rate Vale a buy, 6 analysts rate it a sell, and 7 rate it a hold.

The average volume for Vale has been 25.3 million shares per day over the past 30 days. Vale has a market cap of $19.2 billion and is part of the basic materials sector and metals & mining industry. Shares are down 54.4% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Vale as a

sell

. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Metals & Mining industry and the overall market, VALE SA's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $1,629.00 million or 44.59% when compared to the same quarter last year. Despite a decrease in cash flow of 44.59%, VALE SA is in line with the industry average cash flow growth rate of -54.42%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 54.61%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 46.42% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • VALE SA's earnings per share declined by 46.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, VALE SA increased its bottom line by earning $0.13 versus $0.01 in the prior year. For the next year, the market is expecting a contraction of 539.2% in earnings (-$0.57 versus $0.13).
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Metals & Mining industry average, but is less than that of the S&P 500. The net income has significantly decreased by 47.3% when compared to the same quarter one year ago, falling from -$1,437.00 million to -$2,117.00 million.

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