The Zacks Analyst Blog Highlights: General Motors, Rio Tinto, Augusta Resource, Dominion Diamond and North American Palladium

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Nov 26, 2013, 09:30 ET

CHICAGO, Nov. 26, 2013 /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 the General Motors Company (NYSE:GM-Free Report), Rio Tinto plc (NYSE:RIO-Free Report), Augusta Resource Corp. (AMEX:AZC-Free Report), Dominion Diamond Corp. (NYSE:DDC-Free Report) and North American Palladium Ltd. (AMEX:PAL-Free Report).

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Here are highlights from Monday's Analyst Blog:

GM Shares Rise on Chevy Launches

General Motors Company's (NYSE:GM-Free Report) stock increased 1.1% to $38.12 on Nov 21 after its Chevrolet brand unveiled the 2015 Chevrolet Colorado and announced the launch of two new sedans in the Sonic portfolio. The new 2015 Colorado midsize truck will hit stores next year.

The new Colorado boasts unique design together with better comfort and connectivity features, including forward collision alert and lane departure warning. The vehicle is equipped with 2.5L I-4 or 3.6 L V-6 engines, which offer efficiency and power. The new Colorado offers a payload capacity and trailering capacity of more than 6,700 pounds (3,039 kg). The new Colorado is also available with a diesel engine - the Duramax 2.8L I-4 turbodiesel.

General Motors also announced that its Chevrolet brand will be introducing two new affordably priced sedans in the Sonic portfolio. Sonic RS and Sonic Dusk will be available starting spring 2014 .

The retail price of the 2014 Sonic RS sedan is estimated to begin at $20,530, which includes destination cost of $825. The Sonic Dusk is priced at $20,945 including destination. The title and license fees are not included in the price.

The Sonic RS is equipped with Ecotec 1.4L turbo engine rated at 138 horsepower (103 kW) and 148 lb-ft of torque (200 Nm). The vehicle's performance is enhanced with the unique transmission gearing in the six-speed manual together with a sport-tuned suspension, lowered ride height and has an air dam design at the front. The interior of the vehicle sports aluminum sport pedals, leather-wrapped steering wheel with contrasting stitching and leather front bucket seats with red RS accents.

The EPA-estimated fuel economy rating of the vehicle is 27 mpg in the city and 34 mpg on highway.

The Sonic Dusk offers a ground effects package, rear spoiler, 18-inch aluminum wheels with a Midnight Silver matte finish and four-wheel disc brakes. The vehicle comes in Ashen Grey Metallic color with Ecotec 1.4L turbocharged engine, rated at 138 horsepower (103 kW). The EPA rating of the vehicle is 29 mpg in the city and 40 mpg on highway.

Currently, General Motors retains a Zacks Rank #2 (Buy).

Rio Tinto Upgraded to Outperform

On Nov 21, 2013, we upgraded our recommendation on Rio Tinto plc (NYSE:RIO-Free Report) to Outperform from Underperform, based on the company's recent expansion initiatives.

Why the Upgrade?

Rio Tinto has been successfully streamlining its business activities to focus on core competencies. The company is also extending its operations in lucrative areas. In October this year, Rio Tinto started production from the recently expanded Pilbara mine, the production capacity for which has recently hiked to 290 million tonnes a year.

Additionally, in July, the company commenced coal production at the $2.0 billion Kestrel Mine Extension, which will add 20 operational years to the mine.

The company keeps a tight check on its costs. Rio Tinto plans to cut expenditure on exploration and evaluation by $750 million in 2013, wherein $729 million has already been reduced in the first nine months of 2013. Considering this progress scale, we expect the company to generate higher margins in the coming quarters.

Additionally, the damage estimated due to the wall slide at Kennecott Utah Copper's Bingham Canyon Mine is narrowed, due to a faster-than-expected recovery. The construction of the new heavy vehicle access road is likely to complete in the fourth quarter of 2013, enabling additional production along with remediation and waste movement.

Subsequent to the third-quarter 2013 production report, the Zacks Consensus Estimate for 2014 has increased 7.7% to $5.18 per share in the past 60 days, reflecting a year-over-year growth of 7.6%.

Other Stocks to Consider

Rio Tinto currently carries a Zacks Rank #1 (Strong Buy). Other stocks worth a watch in the mining industry include Augusta Resource Corp. (AMEX:AZC-Free Report), Dominion Diamond Corp. (NYSE:DDC-Free Report) and North American Palladium Ltd. (AMEX:PAL-Free Report). All these carry a Zacks Rank #2 (Buy).

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