Vale Stock: I Sense A Value Trap


  • VALE stock trades at a low forward P/E of only 5.3x.
  • However, market consensus expects a decline in VALE’s EPS in the years ahead, leading to a higher implied FWD P/E.
  • I see such a gloomy projection as quite plausible given China’s struggling economy and VALE’s large exposure to the China market.
Trapped piggy bank

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VALE stock trades at 5x FWD P/E only

Vale S.A. (NYSE:VALE) probably is on the radar of investors seeking deep-value investment opportunities. Indeed, the stock’s valuation metrics are extremely attractive both in absolute and relative standards. More specifically, the following chart below shows

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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