Vale S.A. (VALE): A Value Gem With Upside Catalysts

A handful of technical analysis tools are suggesting that Vale S.A. (NYSE:VALE) overall gets 56.% Sell rating. The stock is also flashing a Sell from the Barchart TrendSpotter trading system. Traders hoping to speculate on the VALE’s short-term trajectory should know that short terms indicators for the stock averaged 60% Sell with an average daily trading volume over the past 20 days at 23288100 shares. VALE stock has overall a 0.5% Sell signal considering medium term indicators and the 50-day average daily volume remained almost 24070848 shares. It’s also worth noting that the stock, whose average daily volume over the 100 days prior to this writing was 21651906 shares, is 33% Sell on the basis of long term indicators.

The share price is currently staying around the first support level of $13.13. Below this, the next support is placed in the zone of $12.74. Till the time, the VALE stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 42.29 on daily chart, which may remain a cause for concern. If the price breaks below $12.74 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $13.74 mark may result into a pull-back move towards $13.96 level.

Vale S.A. (VALE) is projected to climb by 28.09 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $20-month high price target. This represents a whopping 47.82 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $17, which represents a return potential of 25.65 percent when compared to the closing price of the stock of $13.53 on Thursday, December 06. The lowest price target for the stock is $9.4 — slightly more than -30.52 percent from VALE’s current share price.

Here’s a rundown of insider trading activity for sense of Vale S.A. (NYSE:VALE).

VALE shares dropped -0.07 points or -0.51 percent on Thursday to $13.53 with a heavy trade volume of 35.775 million shares. After opening the session at $13.04, the shares went as high as $13.56 and as low as $12.95, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $70.5 billion and now has 5.21 billion shares outstanding. Vale S.A. (VALE) stock has lost -12.14 percent of market value in 21 trading days.

Analysts at Macquarie cut their rating on shares of Vale S.A. (NYSE:VALE) from Outperform to Neutral in their opinion released on September 25. Jefferies analysts bumped their recommendation on VALE stock from Hold to Buy in a separate flash note to investors on September 07. Analysts at Clarksons Platou issued an upgrade from Neutral to Buy for the stock, in a research note that dated back to July 24.

VALE stock has a trailing 3-year beta of 1.53, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $0.78 a share in the trailing twelve months. The stock’s value has surged 14.45 percent year to date (YTD) against a rise of 27.79 percent in 12 month’s time. The company’s shares still trade -16.12 percent away from its 1-year high of $16.13 and 34.09 percent up from 52-week low of $10.09. The average consensus rating on the company is 2.2, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of Vale S.A. (VALE) are trading at a P/E ratio of 10.19 times earnings reported for the past 12 months. The industry VALE operates in has an average P/E of 24.14. Its P/E ratio went as low as 7.31X and as high as 146.71 over the 5-year span. Further, it is sporting a 2.14 on the Price-to-Sales ratio. Compare this with the industry average P/S of 0.77. 38.4 percent is the gross profit margin for Vale S.A. and operating margin sits at 31 percent. Along with this, the net profit margin is 10.8 percent.

VALE will be declaring its Q4 financial results on February 27. Analysts are forecasting revenue to climb 8.1 percent to $9.91B in the next fiscal quarter, while earnings are seen soaring by nearly 36.11 percent to $0.49 per share. History has shown that shares in Vale S.A. have gone up on 10 different earnings reaction days and are predicted to add 0.02 percent when the company reports upcoming earnings. In last reported earnings results, it earned $0.27 per share, worse than the $0.39, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $9.54B, better than the $9.45B analysts expected. Earnings are estimated to increase by 14.8 percent this year, 26.7 percent next year and continue to increase by 19.56 percent annually for the next 5 years.