It's hard to understand the scale of some mining companies... Think about it. The world's largest iron ore producer dug up some 328 million metric tons in 2024.
Imagine 'Owning the Earth' Itself at a Discount
By Vic Lederman, editorial director, Chaikin Analytics
It's hard to understand the scale of some mining companies...
Think about it. The world's largest iron ore producer dug up some 328 million metric tons in 2024.
A typical school bus weighs about 13 tons. So that means the company dug up roughly 25 million school buses' worth of iron ore.
That's still hard to conceptualize. I can imagine 100 school buses... maybe even 1,000. But 25 million is simply too many to wrap may head around.
Here's another way to look at it...
In 2020, the global meat industry produced roughly 328 million metric tons of meat.
In other words, all of the meat consumed by humanity that year would weigh about the same as the iron ore that one company dug out of the ground.
Put simply, companies at this scale own huge chunks of the Earth's natural resources. And through the stock market, you can own a slice of that business.
You would think that would be a wildly profitable endeavor. After all, just about everything we build depends on iron ore.
Despite that, many of these companies are trading at a discount. And there's one in particular I have my eye on...
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I'm talking about Vale (VALE). It's the world's largest iron ore producer. And as we just discussed, that means it digs up the stuff on a truly massive scale.
However, Vale is headquartered in Brazil. And that market has taken a beating in recent years...
We can see the struggles when we look at the iShares MSCI Brazil Fund (EWZ). In the chart below, check out how EWZ and Vale have performed since early 2020...
Over the past five years, EWZ has collapsed by about 45%. And along the way, Vale has also tumbled. The stock is down about 25% over the same time frame.
But this is where it gets interesting...
In the Power Gauge, Vale has a "neutral" overall rating. But digging deeper, it earns a "very bullish" rating in the Financials category...
As you can see, Vale has some interesting bright spots here.
The company earns "bullish" marks for its price-to-book (P/B) and price-to-sales (P/S) ratios. And it earns a "very bullish" rating for its return on equity.
Of those, the P/B ratio particularly stands out to me. After all, a mining company is the sum of the assets it has in the ground multiplied by the price it can sell them for.
Today, Vale is trading at a P/B ratio of 0.97. Anything less than a ratio of 1 means that the stock is trading for less than its assets.
For Vale, that's incredible. If you bought the stock at these levels, it's like buying a huge chunk of the Earth's most important assets for less than they cost.
Now, that doesn't mean you should rush out and buy Vale today...
Again, the company earns a "neutral" overall rating from the Power Gauge. And it's still firmly in a downtrend. So our system is flashing caution on Vale right now.
That said, I'll be watching this one very closely for a stock price reversal. And I recommend you do the same.
It's not every day that you can "own the Earth" like that at a discount.
Good investing,
Vic Lederman
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
+0.68%
11
14
5
S&P 500
-1.41%
103
255
140
Nasdaq
-2.91%
26
43
31
Small Caps
-0.96%
422
1049
432
Bonds
+1.18%
Consumer Staples
+2.71%
4
12
22
— According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks remain somewhat Bearish. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Health Care
+5.26%
Communication
+3.63%
Staples
+3.59%
Financial
+2.35%
Real Estate
+2.14%
Industrials
+1.04%
Discretionary
+0.92%
Materials
+0.82%
Utilities
-1.51%
Information Technology
-2.79%
Energy
-3.83%
* * * *
Industry Focus
Software & Services
68
68
8
Over the past 6 months, the Software & Services subsector (XSW) has outperformed the S&P 500 by +14.70%. Its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #4 of 21 subsectors.
Top Stocks
AMPL
Amplitude, Inc.
ASAN
Asana, Inc.
ANSS
ANSYS, Inc.
* * * *
Top Movers
Gainers
AWK
+6.84%
T
+6.25%
HCA
+6.05%
SBAC
+5.64%
ED
+4.74%
Losers
VST
-28.27%
ANET
-22.35%
GEV
-21.52%
CEG
-20.85%
PWR
-18.32%
* * * *
Earnings Report
Reporting Today
Rating
Before Open
After Close
GM, IVZ, RTX, SYF, SYY
FFIV
BX, LMT
BA, CB, PKG, SBUX, SYK
KMB
BXP
No earnings reporting today.
Earnings Surprises
NUE Nucor Corporation
Q4
$1.22
Beat by $0.60
SOFI SoFi Technologies, Inc.
Q4
$0.05
Beat by $0.01
ARE Alexandria Real Estate Equities, Inc.
Q4
$0.69
Missed by $-0.21
WRB W. R. Berkley Corporation
Q4
$1.13
Beat by $0.18
BRO Brown & Brown, Inc.
Q4
$0.86
Beat by $0.09
* * * *
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