VALE Investors, You Need to Know This

By Harris Dyer • Friday, March 24 12:39 • Permanent Link

We've been asking ourselves recently if the market has placed a fair valuation on VALE. Let's dive into some of the fundamental values of this large-cap Basic Materials company to determine if there might be an opportunity here for value-minded investors.

Vale SA produces and sells iron ore and iron ore pellets for use as raw material in steelmaking in Brazil and internationally. The company is headquartered in Rio de Janeiro, Brazil. The company belongs to the Basic Materials sector, which has an average price to earnings (P/E) ratio of 10.03 and an average price to book (P/B) ratio of 2.08. In contrast, VALE has a trailing 12 month P/E ratio of 4.21 and a P/B ratio of 2.38.

VALE's PEG ratio is 10.64, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.