Vale (VALE) Off To A Strong Start In Pre-Market Activity

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Vale ( VALE) as a pre-market leader 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 $273.2 million.
  • VALE traded 37,400 shares today in the pre-market hours as of 7:42 AM.
  • VALE is up 2.9% today from yesterday's close.

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More details on VALE:

Vale S.A. is engaged in the research, production, and sale of iron ore and pellets, nickel, fertilizer, copper, coal, manganese, ferroalloys, cobalt, platinum group metals, and precious metals. The stock currently has a dividend yield of 1.9%. VALE has a PE ratio of 6.4. Currently there are 3 analysts that rate Vale a buy, 1 analyst rates it a sell, and 9 rate it a hold.

The average volume for Vale has been 29.7 million shares per day over the past 30 days. Vale has a market cap of $35.4 billion and is part of the basic materials sector and metals & mining industry. Shares are down 53.8% year-to-date as of the close of trading on Tuesday.

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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 deteriorating net income, weak operating cash flow, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 140.3% when compared to the same quarter one year ago, falling from $3,565.05 million to -$1,437.00 million.
  • Net operating cash flow has decreased to $2,940.00 million or 36.54% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, VALE SA has marginally lower results.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, VALE SA has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 51.18%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 140.00% 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 has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, VALE SA reported lower earnings of $0.01 versus $0.94 in the prior year. This year, the market expects an improvement in earnings ($1.14 versus $0.01).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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