Vale S.A. (VALE)

Really levered to iron ore, which is really levered to the growth in steel and that, is effectively China. Iron ore prices have fallen and this stock fell a fair bit. These large mining organizations have a great opportunity. Have fallen a lot and look cheap on most fundamentals. If you see global growth happening, these kinds of companies will do well and you could see a decent return in the next little while. In the last little while they have gotten rid of poor assets and sold off businesses that they do not need. Not a bad price to get into these things.

(A Top Pick Nov 14/12. Down 14.48%.) Iron really didn’t get going but he thinks it will work this year. Has a good yield of between 5%-7%.

Very large Brazilian mining company and they are big in iron ore. As China slowed down, a lot of these big companies cut back on capital expenditure. Their cost structure has come down quite considerably and they continue to get rid of non-core assets. The average price on iron ore for them was about $1.09. Thinks iron ore prices are going to go a little bit higher. You want to see China picking up on steel production. Feels this has more room to run.Very large Brazilian mining company and they are big in iron ore. As China slowed down, a lot of these big companies cut back on capital expenditure. Their cost structure has come down quite considerably and they continue to get rid of non-core assets. The average price on iron ore for them was about $1.09. Thinks iron ore prices are going to go a little bit higher. You want to see China picking up on steel production. Feels this has more room to run.

Portfolio managers cut this because of China, but he disagreed. Demand comes out of Asia and not North America. Numbers out of China and India are looking quite good. Produces a lot in Brazil. Thinks they will do well as Asian economies continue to improve. Commodities tend to turn and stay. Copper is looking like it is going to do well.

Super cycle is over and this is a super cycle play. Expect you are in for a slow period of growth for the next couple of years.

Brazilian iron ore company which acquired Inco and is probably regressing considerably because it paid a top-of-the market price. A big mainstay of a lot of emerging-market portfolios. What you think Chinese demand for iron ore is going to be over the next 18 months, is what drives this stock. This demand has substantially diminished as growth is slowed from a .5%-9% to 7%-7.5%.

Would you Short this stock? In this sector, he feels that BHP Billiton (BHP-N) has the most attractive suite of assets. One of Vale’s challenges is not only that it is a base metals stock, but there is a view that it is coming more and more into friction with the Brazilian government over a tax and royalty dispute that has been ongoing for a long time. Doesn’t know if the stock is expensive enough to Short. There are other names that are more clear-cut in that space.

Is a direct drive into the Asian/emerging markets expansion. They sold some royalties a week or two ago. They are cleaning up the balance sheet. You are paid a good yield to wait. If it doesn’t go in the next couple of months you might question getting out.

Sold his holdings last year because 1) the government started interfering with the company and 2) the slowdown in China. A better alternative, which he recently added to his portfolio, is BHP Billiton (BHP-N), a best-of-breed operator, best balance sheet and best dividend growth. Also has energy assets. (See Top Picks.)

Used to own it but sold because China was slowing down and there was interference. BHP is a better asset.

An iron ore company with base metals and fertilizer along with it. Will benefit from the China growth story and have a good yield. World cup and Olympics coming up. Leaders in their field. Were double before the ’08 crash.

[Show did not air however top and past picks were posted to web site]

Iron ore prices are very weak and they’ll probably stay that way. Expects iron ore prices to stabilize at around $80 a ton so there is probably still some downside. This company will still make money at that level. Nickel side of the business is not as good. Believes the super cycle in China is over and now we are into a period where that slope has gone down significantly. We’ll still get growth in China so this company, at the right price, will do well.

Largest iron ore producer globally and this is the most important component of steel. Stock has fallen a lot over the last little while because China’s growth has slowed down considerably. If China has a soft landing, this is fine. Feels the company is doing a lot to cut its capital expenditure and costs. Would prefer a more diversified large mining company. Try to get it at $15-$16.

(Market Call Minute.) Right place to be, but the wrong time to be there.