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I love South America. The weather is warm and people are on the beach all day naked naked naked. The only thing better than South America is making money on South American stocks. Today I sold RIO at 50.65. That’s a 15% gain over my purchase price of 43.97 when I bought this stock on September 30, 2005. That’s a 15% gain in only 4 months. Let’s see how the market did over the same period….Wow..I don’t believe it. The market actually made money…a measly 4.3%. So once again, $$$MR. MARKET$$$ outperforms the market. Can you do that? You? YOU? YOU??
I have 78 consecutive profitable trades of 15% or better. 78!! Did you ever spin a 78 RPM record on your turntable and try to read the label as it went round and round. Then get up and dance around? $$$MR. MARKET$$$ is a 78 RPM record. The market and the mutual fund managers are endomorphs going at 33 RPM. Did you ever play the Atlanta Rhythmn Section album at 45 RPM? It sounds like Fleetwood Mac. Did you ever play the Sergeant Pepper album backwards? Paul is dead…he is dead.
I can’t lose I can’t lose. I am HUGE! Bring me your finest meats and cheeses. I am the greatest stockpicker on the planet. No one can outperform me or outbench press me. I have the best stock picks and the biggest biceps on the planet.
The best news is that there will be another $$$MR. MARKET$$$ pick very soon…very soon. But the only way I will share it with you is if you post on this thread about who the best stock picker in the world is or if you forward this email to 3 of your investor friends and invite them to join this fabulous free site.
I am HUGE!!
================================================== =============
09-30-2005, 03:13 PM
mrmarket
Administrator Join Date: Sep 2003
Posts: 1,596
RIO ==> The Titans are Going to Vegas Winner!
--------------------------------------------------------------------------------
It’s good to see the NHL playing again.
Who is the greatest hockey player of all time? Wayne Gretzsky you say? Give me a break. That limp wrested wuss should be home cooking eggs for Janet Jones. The best hockey player of all time. was Bobby Orr. Who could ever forget this goal scored in overtime to win the Stanley Cup:
Yes, I was only in my childhood at the time, but the memory is burnt into my brain. Similar to another memory I had of a vacation I took in 1983 with a childhood friend of mine. For the first time ever, $$$MR. MARKET$$$ ventured to the Southern Hemisphere for a vacation in Rio. Here is an actual picture of me from that vacation (I think you have seen it before):
Actually I was wearing that outfit when I walked by the desk of the Hotel Nacional on the way up to my room for an afternoon nap. As my friend and I were about to take a snooze, the phone rang.
I picked up the phone…”Hello?” On the other end I heard.
“Hello…this Fernando. You like gay?” Now don’t get me wrong. I think everyone is entitled to their fun. But I thought it was a little untoward of a hotel employee to be ringing my room, just when I was about to take a nap.
“Look…I was just about to go to sleep. Would you mind not calling me again?”
Two minutes later, the phone rings again. “Hello?”
“This is Fernando. You like me come up?” At that point I handed the phone over to my friend who was also a little perturbed for having been woken again. My friend however, was a little less diplomatic.
“Listen….if you ever call this phone again, I’m going to take a Fanta bottle and shove it up your butt!” I never again heard from Fernando.
To this day, I often wonder what happened to Fernando. Hey Fernando, if you ever check this website for stock pick, no hard feelings, ok?
So I got to thinking about Bobby Orr and Rio and it made sense to me that the best stock to buy had to be a stock that made ore in Brazil with the ticker RIO.
Today I bought Companhia Vale do Rio Doce (RIO) at 43.97. I will sell it in 4 to 6 weeks at 50.65. Here are some other reasons why I like RIO.
Incorporated in 1942 and privatized by the Brazilian government in 1997, Companhia Vale do Rio Doce (RIO) is the world's largest producer of iron ore and pellets for use in steelmaking, and the world's second largest producer of manganese and ferroalloys. RIO also produces bauxite, alumina, and primary aluminum, as well as gold, kaolin and potash. It plans to expand into copper and nickel. Through its ownership and operation of railroads and ports, RIO is the largest provider of transportation and logistics in Brazil. As of April 30, 2005, Valepar S.A., held 53.3% of the company's common shares and 34.1% of RIO's outstanding capital
Over the last year, RIO’s stock is up about 100%, yet its PE is only 17. Better still, next year’s forward PE is only 8. The good times are sure to come for our neighbors down South.
What’s so great about heavy metal? Come on feel the noiz? Even though the commodity markets are making millionaires out of these metal heads, there is no reason to believe that the end is near. CVRD has already indicated that they do not have the capacity to meet rising demand. That’s right, Metallica is playing to yet another sellout.
The Beasts from the Far East are gobbling up iron like Godzilla eating Megalon. As a result, the company is hoping to increase production capacity to 275 million tons by 2007 – an increase of almost 50%.
CVRD management believes that iron prices could rise by double-digit amounts for 2006. This is really good news for RIO shareholders, since the cost to extricate the ore does not change considerably with increases in commodities prices. Thus, margins really blow out.
By the end of 2004, the worldwide economic recovery, combined with the weakness of the US Dollar, provided increased industrial demand for most metals, following several years of decline.
Brazil's Bovespa stock index is up big time this year, powered by companies such as Companhia Vale do Rio Doce. Rio and other basic industry companies should continue to do well considering the world's voracious appetite for raw materials, especially in China. At the vast open-face iron ore mine of CVRD at Carajás in northern Brazil, men and machines work round the clock. The reason? One word: China. "If we filled every order we got from China," says Gabriel Stoliar, director for planning and strategy, "we'd have to double the size of the company." To keep up, the world's biggest producer of iron ore is racing to ramp up production. CVRD will spend $1.2 billion on expansion this year alone.
The Brazilian company is far from alone. South America is learning firsthand the insatiable demands of a fast-growing China. China's industrial and consumer revolution is fueling domestic growth of almost 10% a year. As tens of millions of Chinese move from the countryside to the city every year, demand for steel for construction is soaring.
That mutual dependency is being cemented with billions in investment. Shanghai Baosteel Group Corp. has teamed up with CVRD to build a steel mill in northern Brazil at a cost of $1.5 billion. CVRD also has a partnership with Chinese aluminum producer Chalco to build an alumina refinery, also in northern Brazil, for $1 billion. CVRD sells to the top 23 steel companies in China
CVRD's business elsewhere in Asia also is picking up. Recently the company signed a long-term contract with JFE Steel Corp., one of Japan's largest steel makers, to supply an additional 70 million tons of iron ore between 2005 and 2014.
Steel prices haven't been this high since the early 1970s. This is the best Steel has ever been since George “the Animal” Steele ate his last turnbuckle.
Iron ore and iron pellets make up more than 60% of CVRD’s revenue.It also produces manganese, aluminum, copper and other in-demand minerals and metals. CVRD is operating flat out on almost all of their commodity production and they will continue to grow.
CVRD has an $8.5 billion project pipeline through 2010. RIO seeks to strengthen its position among the world's leading mining companies by focusing on diversified growth in mining, and by expanding in logistics and energy. Capital spending is expected to total $3.3 billion in 2005, and in excess of $3.3 billion in 2006.
CVRD's first copper mine, which has proven reserves of 245 million tons, started shipping copper ore in June. Copper prices are also on a rocket ride. Copper prices in the first half of 2005 were nearly 17% higher than last year. The global production deficit of copper increased nearly 50% in 2004. With US fiscal policy expected to maintain the weakness of the dollar, the prospects of continued price growth are good. Titanomega’s dog name is Copper.
What does this mean for earnings? Woooo! 2005 sales will almost double 2004’s 51% growth based on both price and volume increases. According to statistics compiled by the International Iron and Steel Institute, global steel production rose 8.7% in 2004, while China's steel production was up 23.2%. Through the first six months of 2005, global steel production rose 7.6%, and China's steel production was up 28.3% for the same period. The financial results have been stellar:
* 112.157 million tons of iron ore in 1H05, capital expenditure of US$ 2.5 billion in the last 12 months and the achievement of the investment grade rating.
* 62.386 million tons of iron ore and pellets shipped in 2Q05, beating the 4Q04 record of 61.824 million tons.
* Gross revenues of US$ 3.721 billion, 53.3% higher than the previous
quarterly record, of US$ 2.428 billion for 4Q04.
* Operating profit reached US$ 1.771 billion, 112.9% more than in 2Q04.
* Adjusted EBIT margin of 50.1%, 680 basis points (bp) higher than the
previous record of 43.3% in 2Q04.
From 2002 through 2005, RIO increased its dividend at a compound annual rate of 63.2%. Given the amount of capital they have been re-investing, this dividend increase indicates to me that the company believes that there is a lot more cash to come out of the ground. Also, RIO's diversification into other base metals such as copper and nickel should enhance its long-term earnings and dividend growth and ultimately lead to a higher valuation for the shares.
While mining is a capital-intensive business - CVRD's debt totals around $6 billion - high commodity prices and the firm's cost-reduction programs over the last couple of years have translated into solid earnings growth. So their debt to total cap is only about 28%. That’s actually really healthy for a company of this size.
Return on Equity for RIO is 51%. Return on Assets is 19%. That means for all of the capital that CVRD is reinvesting, they should be spitting out double digit returns. Expect strong steel production growth to keep the iron ore market tight for the next 12 months, allowing iron ore producers to push through another price increase. Customers have been particularly anxious about securing long term supply contracts. This means that they believe prices are going up as well. Prices for lump iron ore will likely rise to US$54.40 a metric ton next year from US$49.40, and seaborne iron ore demand is expected to grow through to 2010, UBS said. Iron ore prices should be unchanged in 2007 and fall to US$40.80 the following year. CVRD is the most sensitive stock to changes in iron ore contracts, with a 10%
price rise pushing up earnings per share 16%.
Companhia Vale do Rio Doce has the advantage of a wide-open world economy, easy access to Western knowledge and talent, practically unlimited money from global capital markets, and low-cost skilled domestic labor. Also, CVRD’s adaptive skills have been honed by surviving financial crises and regulatory chaos at home. They know how to discipline themselves when times aren’t so hot. This discipline should prevent them from getting sloppy now that margins are wide.
Stop your yakking $$$MR. MARKET$$$ and tell us how much money RIO will make. After all, it’s all about earnings earnings earnings. ANAL-ysts have RIO earning $4.45/share for 2005 and $5.20 in 2006. This is on revenues of $13.1 B in 2005 and $14.8 B in 2006. I guess that the ANAL-ysts really have not been paying attention. Maybe they might want some Fanta to wake themselves up? Higher energy prices alone are enough to crank ore prices up in the short run. I’m looking for another overtime Stanley Cup winner here. 2005 revenues will actually be $14.1 billion which will generate earnings of $5.22/share and setting a base for 2006 to allow for earnings of $5.97/share. Earnings for this quarter are due November 9..we’ll see if I’m on track. At today’s PE multiple of 17.67, you’d end up with a 2006 stock price of $105.49, which is well past my sell price target. You’re damn right they will keep paying dividends!
Here’s what RIO’s money man has to say:
CVRD Chief Financial Officer Fabio Barbosa says the good times can keep rolling on.
"We believe this is a long wave. There's a lot of additional demand by the Chinese society that will be fulfilled by growth in industry, consumption and investments," he said. "That will represent additional support for the demand for minerals and metals in the long term."
"Despite our efforts, and what competitors are doing, we continue to see a tight market ahead. We feel we must increase our total (annual iron ore) supply from 230 million tons to about 250 million tons and we don't think that is enough yet to tap all the market needs," he said.
If I remember my economics well enough. Limited supply and increased demand means prices go up. Prices go up means that RIO’s stock price goes up.
Now if my portfolio can’t keep up with inflation, at least I won’t blame it on RIO.
I am HUGE!!
If you liked this write up, send it on to a friend. I always like to hear what you have to think of this stock pick. Sharing of investment ideas is healthy and fun.
Bring me your finest meats and cheeses.
$$$MR. MARKET$$$
I have 78 consecutive profitable trades of 15% or better. 78!! Did you ever spin a 78 RPM record on your turntable and try to read the label as it went round and round. Then get up and dance around? $$$MR. MARKET$$$ is a 78 RPM record. The market and the mutual fund managers are endomorphs going at 33 RPM. Did you ever play the Atlanta Rhythmn Section album at 45 RPM? It sounds like Fleetwood Mac. Did you ever play the Sergeant Pepper album backwards? Paul is dead…he is dead.
I can’t lose I can’t lose. I am HUGE! Bring me your finest meats and cheeses. I am the greatest stockpicker on the planet. No one can outperform me or outbench press me. I have the best stock picks and the biggest biceps on the planet.
The best news is that there will be another $$$MR. MARKET$$$ pick very soon…very soon. But the only way I will share it with you is if you post on this thread about who the best stock picker in the world is or if you forward this email to 3 of your investor friends and invite them to join this fabulous free site.
I am HUGE!!
================================================== =============
09-30-2005, 03:13 PM
mrmarket
Administrator Join Date: Sep 2003
Posts: 1,596
RIO ==> The Titans are Going to Vegas Winner!
--------------------------------------------------------------------------------
It’s good to see the NHL playing again.
Who is the greatest hockey player of all time? Wayne Gretzsky you say? Give me a break. That limp wrested wuss should be home cooking eggs for Janet Jones. The best hockey player of all time. was Bobby Orr. Who could ever forget this goal scored in overtime to win the Stanley Cup:
Yes, I was only in my childhood at the time, but the memory is burnt into my brain. Similar to another memory I had of a vacation I took in 1983 with a childhood friend of mine. For the first time ever, $$$MR. MARKET$$$ ventured to the Southern Hemisphere for a vacation in Rio. Here is an actual picture of me from that vacation (I think you have seen it before):
Actually I was wearing that outfit when I walked by the desk of the Hotel Nacional on the way up to my room for an afternoon nap. As my friend and I were about to take a snooze, the phone rang.
I picked up the phone…”Hello?” On the other end I heard.
“Hello…this Fernando. You like gay?” Now don’t get me wrong. I think everyone is entitled to their fun. But I thought it was a little untoward of a hotel employee to be ringing my room, just when I was about to take a nap.
“Look…I was just about to go to sleep. Would you mind not calling me again?”
Two minutes later, the phone rings again. “Hello?”
“This is Fernando. You like me come up?” At that point I handed the phone over to my friend who was also a little perturbed for having been woken again. My friend however, was a little less diplomatic.
“Listen….if you ever call this phone again, I’m going to take a Fanta bottle and shove it up your butt!” I never again heard from Fernando.
To this day, I often wonder what happened to Fernando. Hey Fernando, if you ever check this website for stock pick, no hard feelings, ok?
So I got to thinking about Bobby Orr and Rio and it made sense to me that the best stock to buy had to be a stock that made ore in Brazil with the ticker RIO.
Today I bought Companhia Vale do Rio Doce (RIO) at 43.97. I will sell it in 4 to 6 weeks at 50.65. Here are some other reasons why I like RIO.
Incorporated in 1942 and privatized by the Brazilian government in 1997, Companhia Vale do Rio Doce (RIO) is the world's largest producer of iron ore and pellets for use in steelmaking, and the world's second largest producer of manganese and ferroalloys. RIO also produces bauxite, alumina, and primary aluminum, as well as gold, kaolin and potash. It plans to expand into copper and nickel. Through its ownership and operation of railroads and ports, RIO is the largest provider of transportation and logistics in Brazil. As of April 30, 2005, Valepar S.A., held 53.3% of the company's common shares and 34.1% of RIO's outstanding capital
Over the last year, RIO’s stock is up about 100%, yet its PE is only 17. Better still, next year’s forward PE is only 8. The good times are sure to come for our neighbors down South.
What’s so great about heavy metal? Come on feel the noiz? Even though the commodity markets are making millionaires out of these metal heads, there is no reason to believe that the end is near. CVRD has already indicated that they do not have the capacity to meet rising demand. That’s right, Metallica is playing to yet another sellout.
The Beasts from the Far East are gobbling up iron like Godzilla eating Megalon. As a result, the company is hoping to increase production capacity to 275 million tons by 2007 – an increase of almost 50%.
CVRD management believes that iron prices could rise by double-digit amounts for 2006. This is really good news for RIO shareholders, since the cost to extricate the ore does not change considerably with increases in commodities prices. Thus, margins really blow out.
By the end of 2004, the worldwide economic recovery, combined with the weakness of the US Dollar, provided increased industrial demand for most metals, following several years of decline.
Brazil's Bovespa stock index is up big time this year, powered by companies such as Companhia Vale do Rio Doce. Rio and other basic industry companies should continue to do well considering the world's voracious appetite for raw materials, especially in China. At the vast open-face iron ore mine of CVRD at Carajás in northern Brazil, men and machines work round the clock. The reason? One word: China. "If we filled every order we got from China," says Gabriel Stoliar, director for planning and strategy, "we'd have to double the size of the company." To keep up, the world's biggest producer of iron ore is racing to ramp up production. CVRD will spend $1.2 billion on expansion this year alone.
The Brazilian company is far from alone. South America is learning firsthand the insatiable demands of a fast-growing China. China's industrial and consumer revolution is fueling domestic growth of almost 10% a year. As tens of millions of Chinese move from the countryside to the city every year, demand for steel for construction is soaring.
That mutual dependency is being cemented with billions in investment. Shanghai Baosteel Group Corp. has teamed up with CVRD to build a steel mill in northern Brazil at a cost of $1.5 billion. CVRD also has a partnership with Chinese aluminum producer Chalco to build an alumina refinery, also in northern Brazil, for $1 billion. CVRD sells to the top 23 steel companies in China
CVRD's business elsewhere in Asia also is picking up. Recently the company signed a long-term contract with JFE Steel Corp., one of Japan's largest steel makers, to supply an additional 70 million tons of iron ore between 2005 and 2014.
Steel prices haven't been this high since the early 1970s. This is the best Steel has ever been since George “the Animal” Steele ate his last turnbuckle.
Iron ore and iron pellets make up more than 60% of CVRD’s revenue.It also produces manganese, aluminum, copper and other in-demand minerals and metals. CVRD is operating flat out on almost all of their commodity production and they will continue to grow.
CVRD has an $8.5 billion project pipeline through 2010. RIO seeks to strengthen its position among the world's leading mining companies by focusing on diversified growth in mining, and by expanding in logistics and energy. Capital spending is expected to total $3.3 billion in 2005, and in excess of $3.3 billion in 2006.
CVRD's first copper mine, which has proven reserves of 245 million tons, started shipping copper ore in June. Copper prices are also on a rocket ride. Copper prices in the first half of 2005 were nearly 17% higher than last year. The global production deficit of copper increased nearly 50% in 2004. With US fiscal policy expected to maintain the weakness of the dollar, the prospects of continued price growth are good. Titanomega’s dog name is Copper.
What does this mean for earnings? Woooo! 2005 sales will almost double 2004’s 51% growth based on both price and volume increases. According to statistics compiled by the International Iron and Steel Institute, global steel production rose 8.7% in 2004, while China's steel production was up 23.2%. Through the first six months of 2005, global steel production rose 7.6%, and China's steel production was up 28.3% for the same period. The financial results have been stellar:
* 112.157 million tons of iron ore in 1H05, capital expenditure of US$ 2.5 billion in the last 12 months and the achievement of the investment grade rating.
* 62.386 million tons of iron ore and pellets shipped in 2Q05, beating the 4Q04 record of 61.824 million tons.
* Gross revenues of US$ 3.721 billion, 53.3% higher than the previous
quarterly record, of US$ 2.428 billion for 4Q04.
* Operating profit reached US$ 1.771 billion, 112.9% more than in 2Q04.
* Adjusted EBIT margin of 50.1%, 680 basis points (bp) higher than the
previous record of 43.3% in 2Q04.
From 2002 through 2005, RIO increased its dividend at a compound annual rate of 63.2%. Given the amount of capital they have been re-investing, this dividend increase indicates to me that the company believes that there is a lot more cash to come out of the ground. Also, RIO's diversification into other base metals such as copper and nickel should enhance its long-term earnings and dividend growth and ultimately lead to a higher valuation for the shares.
While mining is a capital-intensive business - CVRD's debt totals around $6 billion - high commodity prices and the firm's cost-reduction programs over the last couple of years have translated into solid earnings growth. So their debt to total cap is only about 28%. That’s actually really healthy for a company of this size.
Return on Equity for RIO is 51%. Return on Assets is 19%. That means for all of the capital that CVRD is reinvesting, they should be spitting out double digit returns. Expect strong steel production growth to keep the iron ore market tight for the next 12 months, allowing iron ore producers to push through another price increase. Customers have been particularly anxious about securing long term supply contracts. This means that they believe prices are going up as well. Prices for lump iron ore will likely rise to US$54.40 a metric ton next year from US$49.40, and seaborne iron ore demand is expected to grow through to 2010, UBS said. Iron ore prices should be unchanged in 2007 and fall to US$40.80 the following year. CVRD is the most sensitive stock to changes in iron ore contracts, with a 10%
price rise pushing up earnings per share 16%.
Companhia Vale do Rio Doce has the advantage of a wide-open world economy, easy access to Western knowledge and talent, practically unlimited money from global capital markets, and low-cost skilled domestic labor. Also, CVRD’s adaptive skills have been honed by surviving financial crises and regulatory chaos at home. They know how to discipline themselves when times aren’t so hot. This discipline should prevent them from getting sloppy now that margins are wide.
Stop your yakking $$$MR. MARKET$$$ and tell us how much money RIO will make. After all, it’s all about earnings earnings earnings. ANAL-ysts have RIO earning $4.45/share for 2005 and $5.20 in 2006. This is on revenues of $13.1 B in 2005 and $14.8 B in 2006. I guess that the ANAL-ysts really have not been paying attention. Maybe they might want some Fanta to wake themselves up? Higher energy prices alone are enough to crank ore prices up in the short run. I’m looking for another overtime Stanley Cup winner here. 2005 revenues will actually be $14.1 billion which will generate earnings of $5.22/share and setting a base for 2006 to allow for earnings of $5.97/share. Earnings for this quarter are due November 9..we’ll see if I’m on track. At today’s PE multiple of 17.67, you’d end up with a 2006 stock price of $105.49, which is well past my sell price target. You’re damn right they will keep paying dividends!
Here’s what RIO’s money man has to say:
CVRD Chief Financial Officer Fabio Barbosa says the good times can keep rolling on.
"We believe this is a long wave. There's a lot of additional demand by the Chinese society that will be fulfilled by growth in industry, consumption and investments," he said. "That will represent additional support for the demand for minerals and metals in the long term."
"Despite our efforts, and what competitors are doing, we continue to see a tight market ahead. We feel we must increase our total (annual iron ore) supply from 230 million tons to about 250 million tons and we don't think that is enough yet to tap all the market needs," he said.
If I remember my economics well enough. Limited supply and increased demand means prices go up. Prices go up means that RIO’s stock price goes up.
Now if my portfolio can’t keep up with inflation, at least I won’t blame it on RIO.
I am HUGE!!
If you liked this write up, send it on to a friend. I always like to hear what you have to think of this stock pick. Sharing of investment ideas is healthy and fun.
Bring me your finest meats and cheeses.
$$$MR. MARKET$$$
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