Billionaire Cliff Asness Portfolio: 5 Stocks Under $20

1. Vale S.A. (NYSE:VALE)

AQR Capital Management’s Stake Value: $180 million

Percentage of AQR Capital Management’s 13F Portfolio: 0.33%

Number of Hedge Fund Holders: 27

Vale S.A. (NYSE:VALE)’s share price lost almost half of its value in the past couple of months due to weakening iron ore demand from China. However, the selloff has created a good entry point for new investors. The company’s strategy of returning billions of dollars through dividends makes it a good stock to hold for the long term. At present, the company offers a semi-annual dividend of $1.51 per share to shareholders.   

In the third quarter investor letter, Miller Value Partners, an investment management firm, discussed its stance on Vale. Here is what Miller Value Partners stated:

“Vale (VALE) was the top detractor over the quarter, falling 32.6% in sympathy with iron ore’s 48% decline from record highs on China capacity curbs and growing fears of financial issues within the property sector. Vale reported Q2 EBITDA of $11.24Bn, slightly below consensus of $11.47Bn on higher than expected iron ore cash costs. Free cash flow of $6.5Bn (35% annualized yield) came in well ahead of expectations, driving $2.6Bn of stock buybacks and a 1H21 dividend of $7.6Bn, implying year-to-date (YTD) shareholder returns of roughly $13.8Bn (19% of the current market cap). Management maintained FY21 production guidance for iron ore of 315-335 Metric tons (Mt) and lowered year-end 2022 exit capacity to 370Mt (from 400Mt) due to Northern System licensing delays. Additionally, the company hosted their annual Investor Day, outlining new production initiatives aimed at becoming a key supplier to steelmakers in light of decarbonization goals.”

You can also take a look at the Top 10 Stock Picks of Brad Farber’s Atika Capital and 10 Best Inexpensive Stocks to Buy Right Now.

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