Top 5 Zinc Stocks Picked By Hedge Funds for 2022

4. Vale S.A. (NYSE:VALE)

Number of Hedge Fund Holdings: 27

One of the largest logistics operators in Brazil, Vale S.A. (NYSE:VALE) is a multinational corporation engaged in metals and mining of iron ore, nickel, manganese, copper, and zinc. The company is based in Rio De Janeiro, and as of October 19, has a market cap of $61.2 billion. In Q2 2022, Vale S.A. (NYSE:VALE) posted an EPS of $1.32, beating estimates of $0.81 by $0.51. Moreover, the company generated a total revenue of $11.16 billion in Q2 2022. Vale S.A. (NYSE:VALE) managed to maintain investor interest in Q2 2022, with 27 hedge funds having stakes in the company in both, Q1 and Q2 of 2022.

On October 5, Deutsche Bank analyst Liam Fitzpatrick lowered the price target on Vale S.A. (NYSE:VALE) to $19 from $20, keeping a Hold rating on the shares. The reduced target prices on metals and mining stocks was to reflect weakening demand and macroeconomic risks and while the analyst sees downside risks near-term, he contends that metal equities have already been priced in a mild recession. He predicts that when the global cycle is restored, the market will be faced with structurally tight supply and prices would once again rise to levels which would provide incentive to investors.

Here is what GMO LLC had to say about Vale S.A. (NYSE:VALE) in their 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.”