We recently published a list of the 10 Best Low Priced Stocks to Invest in Now. In this article, we are going to take a look at where Vale S.A. (NYSE:VALE) stands against the other best low priced stocks to invest in now.
According to a report by Charles Schwab published on December 9, the U.S. economy and stock market are entering 2025 from a position of relative strength, but the risks of volatility, particularly those related to policy, are significantly higher compared to the previous year. This uncertainty is largely driven by the policy proposals of President-elect Donald Trump, whose unconventional governing style and fluid policy positions have made forecasting their impact on domestic and global conditions extremely challenging. The report highlights that Trump’s policy proposals, which include lower taxes and reduced regulations, are generally seen as growth-positive. However, these are offset by proposals for higher tariffs on imported goods and mass deportations of illegal immigrants, which are generally considered stagflationary, at least in the short term.
In terms of the stock market, the report suggests that while equities can perform well from the beginning to the end of the year, the volatility is likely to be higher in 2025 compared to 2024. The S&P 500 is currently above its 50 and 200-day moving averages, which historically has been a positive indicator for future performance. However, the report cautions that after a year with 57 record highs, the median gain in the following year has historically been around 5.8%, suggesting a potential for a step back in performance. The report also notes that the S&P 500’s 5-year normalized P/E ratio is quite stretched, indicating a product of market enthusiasm but not necessarily a near-term risk.
For small caps, the report notes that the Russell 2000 has struggled in the current bull market due to higher interest rates and weaker profit profiles. The report suggests that profitable small caps could perform well if economic growth holds and the Fed takes a gradual approach to rate cuts, but the index as a whole might continue to face challenges if earnings growth does not improve.
READ ALSO: 10 Best Gold Royalty and Small-Cap Gold Stocks to Buy and 12 Best Energy Stocks To Invest In Now.
U.S. Stocks in 2025: Growth, Risks, and Opportunities
In an interview with Bloomberg on December 24, Jonathan D. Corpina, Senior Managing Partner at Meridian Equity Partners, discussed his outlook for U.S. stocks in 2025. Corpina noted that the market is finishing the year strong, supported by a resilient economy and key events such as the election and rate cuts being out of the way. He believes that the market will continue to move higher in 2025, though it will take a few quarters for the new administration to implement new policies and procedures.
Corpina also addressed investor expectations for strong double-digit earnings growth for S&P 500 companies, suggesting that while the bar is set high, it’s important to manage expectations. He emphasized that the economy remains fragile, and companies are still adjusting to the new environment and administration. He advised a cautious approach, noting that there are many uncertainties that could impact the market in the coming year. On the U.S. financial sector, Corpina is optimistic. He anticipates a lot of M&A activity and IPOs in 2025, driven by a pro-business administration.
While the U.S. economy and stock market are entering 2025 with a foundation of relative strength, the landscape remains fraught with uncertainty.
Aerial view of a giant iron ore mine, showcasing the mineral deposits of the company’s Ferrous Minerals segment.
Our Methodology
To compile our list of the 10 best low priced stocks to invest in now, we used Finviz and Yahoo stock screeners to find the 50 largest companies trading below the price of $10 as of December 24. We then used Insider Monkey’s Hedge Fund database to rank 10 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Vale S.A. (NYSE:VALE)
Number of Hedge Fund Investors: 41
Stock Price as of December 24: $8.94
Vale S.A. (NYSE:VALE) is one of the world’s largest miners and processors of iron ore and nickel, headquartered in Brazil. The company supplies raw materials to industries such as steelmaking, construction, and electronics manufacturing. Vale S.A.’s (NYSE:VALE) competitive advantage comes from its vast resource reserves, efficient logistics infrastructure, and sustainable mining practices.
Vale S.A. (NYSE:VALE) is actively expanding and optimizing its iron ore portfolio to enhance its commercial flexibility and value creation. The company is making significant progress on its projects, with the recent successful startup of the Vargem Grande project, with the implementation of new assets. The Vargem Grande project is expected to add 15 million tons per year of iron ore production capacity. The next major project, Capanema, is 91% complete and is scheduled to start up in the first half of 2025, adding another 15 million tons of capacity. These projects are critical for the company to achieve its goal of structurally producing about 350 million tons of iron ore annually, with 80% to 90% being high-quality products such as Brazilian Blend Fines (BRBF), a product produced after blending fines from Carajas mine, along with other agglomerated products.
Vale S.A. (NYSE:VALE) is also committed to growing its Energy Transition Metals (ETM) business, which includes copper and nickel production. The company has seen strong year-on-year production performance in both metals, driven by the successful implementation of asset review initiatives. The company has recently revised its 2024 all-in cost guidance for copper downward to between $2,900 and $3,300 per ton, reflecting improved operational efficiency and higher unit by-product revenues.
Overall, VALE ranks 2nd on our list of best low priced stocks to invest in now. While we acknowledge the potential of VALE to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than VALE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
