Miller Value Partners, an investment management firm, published its “Income Strategy” first quarter 2022 investor letter – a copy of which can be downloaded here. The Miller Income Strategy returned -10.08% for the first quarter, while the unmanaged high-yield benchmark was down -4.51%. Most asset classes declined, and smaller companies, which make up a large share of the Income Strategy, generally fared the worst. This is apparent in the Russell 2000’s -7.5% drop against the larger-cap Russell 1000’s -5.1% decline. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Miller Value Partners Income Strategy mentioned Vale S.A. (NYSE:VALE) and explained its insights for the company. Founded in 1942, Vale S.A. (NYSE:VALE) is a State of Rio de Janeiro, Brazil-based mining company with a $73.9 billion market capitalization. Vale S.A. (NYSE:VALE) delivered a 8.70% return since the beginning of the year, while its 12-month returns are down by -29.67%. The stock closed at $14.70 per share on May 10, 2022.
Here is what Miller Value Partners Income Strategy has to say about Vale S.A. (NYSE:VALE) in its Q1 2022 investor letter:
“Vale SA (NYSE:VALE) was the top contributor for the quarter, gaining 48.1%. Vale reported full-year 2021 (FY21) revenues of $54.5 billion, up 37.8% year over year (Y/Y), and adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $31.2 billion, up 87.8% Y/Y. Vale paid out $13.5 billion in dividends and repurchased $5.5 billion in common stock, representing $19.0 billion in capital returned to shareholders in 2021, or ~20.1% of the company’s market cap. The company’s base metals segment improved in 4Q21, with nickel production increasing 59% from 3Q21 to 48.0 thousand tonnes (KT) and copper production increasing 12% from 3Q21 to 77.5 kt. Increased electric vehicle (EV) production is expected to serve as a significant tailwind for this segment, as both metals are integral components of the EV battery manufacturing process, with management citing an expected compound annual growth rate from 2019-2031 of 29.9% and 20.6% in EV-driven demand for nickel and copper, respectively.”
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Our calculations show that Vale S.A. (NYSE:VALE) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Vale S.A. (NYSE:VALE) was in 25 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 27 funds in the previous quarter. Vale S.A. (NYSE:VALE) delivered a -12.96% return in the past 3 months.
In November 2021, we also shared another hedge fund’s views on Vale S.A. (NYSE:VALE) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.
