Should You Consider Acquiring VALE Shares?

Grantham Mayo Van Otterloo & Co. LLC, an asset management firm, published its first-quarter 2021 investor letter – a copy of which can be downloaded here. In its first-quarter letter, the fund mentioned that there are always risks in the resources sector, and they believe investors are likely to be rewarded with a compelling mix of strong returns, inflation protection, and diversification. Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, GMO LLC 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 an $84.3 billion market capitalization. Vale S.A. (NYSE:VALE) delivered a 20.26% return since the beginning of the year, while its 12-month returns are down by -24.73%. The stock closed at $16.86 per share on June 10, 2022.

Here is what GMO LLC has to say about Vale S.A. (NYSE:VALE) in its Q1 2022 investor letter:

“Let’s look at Vale (NYSE:VALE), the world’s largest iron ore producer, as a case study for how shareholders can be rewarded. Vale’s stock price is about where it was at the beginning of last year. Despite the market’s lack of enthusiasm, the company generated about $20 billion of free cash flow last year. Not bad for a company with a market cap of a little over $100 billion and no substantive debt as of the end of March. 4 What did the company do with all that cash? Last year, Vale paid out about $9 billion in regularly scheduled dividends and distributed another $10 billion between extra dividends and share repurchases. Combined with dividends distributed in the first quarter of this year and a recently announced share repurchase, Vale has returned or announced the return of over $33 billion since the beginning of last year, almost a 32% yield relative to the market cap of the company. Not a bad way to win.”

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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 27 hedge fund portfolios at the end of the first quarter of 2022, compared to 25 funds in the previous quarter. Vale S.A. (NYSE:VALE) delivered a -11.59% return in the past 3 months.

In May 2022, 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.