CHICAGO, Dec. 10, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Vale S.A. (NYSE: VALE), Rio Tinto plc (NYSE: RIO), BHP Billiton Ltd. (NYSE: BHP), SIRIUS XM Radio Inc. (Nasdaq: SIRI) and Liberty Media Corp. (Nasdaq: LMCA).
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Friday's Analyst Blog:
Vale's Simandou Project Shelved
Vale S.A. (NYSE: VALE) expressed its inability to continue working on the much sought after Simandou project, citing the Guinea government's inordinate delay as a reason. Although the company still remains interested in working on the site of the world's largest untapped deposit of iron ore, uncertainty associated with the delay from the government to review the mining contract has given rise to serious misgivings regarding the future of the project.
The company stopped working on the project since last spring; and continued with halting operations on the Zogota project months later. Vale is developing both the projects along with BSGR, the mining arm of Israeli entrepreneur Beny Steinmetz's business conglomerate. The Guinea government is expecting the review to be complete by the first quarter of 2013, which will decide the fate of both the shelved projects.
Initially, the company had proposed to export iron ore through Liberia, a much shorter route, in lieu of building a 700KMs rail line. Unlike its competitor, Rio Tinto plc (NYSE: RIO), which is exporting iron ore through Guinea, the shorter route would have helped the company to reduce the project costs. However, the proposal has been rejected by the government and the operations will be carried on through Guinea, thus increasing the project costs which are already estimated around $10 billion.
The project was awarded to Vale after it was withdrawn from Rio Tinto on the grounds of slow movement in 2008. The delay in operations for the Simandou project will pose a certain threat to the company in the highly competitive demand and weaker iron ore price scenario.
Also, the company has plans of dissociating itself from its non-core assets and lowering its spending in the year 2013 by almost a quarter. The first non-core asset to be divested is the oil and gas division, bought to hedge when the energy prices were rising. The company is expected to soon divest it since it no longer serves the purpose of purchase.
Vale also plans to boost its production by 20-25 million tons after it reaches 400 million metric tons in 2017. However, the company projects a decline in the output for the third consecutive year in 2013. Vale is cutting down its investments in non-performing assets and suspending projects not deemed viable for the company's growth.
The company is also in discussion with the Chinese government over a port ban on its gigantic 400,000 deadweight ton Valemax ships, which is expected to come to an agreement in 2013. The use of these vessels will save the company $6 per ton in shipping costs, compared to the existing ones with a capacity of 180,000 to 200,000 tons.
Vale S.A. is one of the world's largest producers and exporters of iron ore and pellets. Vale holds a Zacks #3 Rank, which translates into a short-term (1-3 months) 'Hold' rating. The company keeps improving its competitiveness against rival companies, such as Rio Tinto, holding a Zacks #3 Rank and BHP Billiton Ltd. (NYSE: BHP) holding a Zacks #4 Rank implying a 'Sell' rating.
SIRI Boosts Shareholder Wealth
SIRIUS XM Radio Inc. (Nasdaq: SIRI), the largest commercial satellite-radio service operator in the U.S., has decided to enhance its shareholders' wealth. Yesterday, the Board of Directors of SIRIUS XM has approved a $2 billion common stock repurchase program. Shares of common stock will be purchased from time to time in the open market and in privately negotiated transactions. Additionally, the Board also approved a special dividend of 5 cents per share payable on December 28, 2012 to stockholders of record as of the close of business on December 18, 2012. The special dividend will cost the company about $325 million.
SIRIUS XM maintains its strong performance primarily due to impressive management execution on the back of rising auto industry sales. Management has raised the financial outlook for the rest of 2012 and expects the growth momentum of the company to expand further. Despite price rise of its services, SIRIUS XM maintains its churn rate. Solid conversion rate and an effective marketing strategy helped the company to strengthen its financials.
The biggest beneficiary of this newly initiated share buyback and special dividend will be the company's largest shareholder Liberty Media Corp. (Nasdaq: LMCA). Liberty Media has filed a new application to the U.S. Federal Communications Commission, in which the company stated its intention to acquire more than 50% of SIRIUS XM, so that it can take full control of the Board of SIRIUS XM. At present, it holds 49.8% stake in SIRIUS XM's total outstanding shares. Liberty Media will participate in SIRIUS XM's share repurchase program in a way that will not affect its ownership interest.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
SOURCE Zacks Investment Research, Inc.