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Morgan Stanley buys 4.14 million shares of Vale (MS, VALE)

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Even though Morgan Stanley ( MS , quote ), along with JP Morgan ( JPM , quote ), previously released reports projecting soft commodity prices for 2012, the firm's recent 13F filing with the Securities and Exchange commission revealed that it bought 4.14 mlllion shares of Vale SA ( VALE , quote ) in the third quarter of 2011.

Of note is that Goldman Sachs ( GS , quote ), unlike Morgan Stanley (MS) or JP Morgan (JPM) expects a strong 2012 for commodity prices.

Value SA (VALE) is the largest Brazilian industrial metals and minerals company.

Morgan Stanley (MS) is certainly not swing trading with VALE as it is down for the week, month, quarter and year. Overall, for the year, VALE is down almost 30%. Now around $23, it is only about 10% above its year low.

But there is much to like about the future prospects of Vale SA. Its gross margin and operating margin are both above 50%. The profit margin is more than 38%, with a 20% profit margin being considered strong.

The price-to-earnings ratio is only 5. The dividend yield is almost 8% in a market where the average dividend for a stock on the Standard & Poor's 500 Index is less than 2%.

The professional analyst community is bullish on Vale SA, too. Now around $23 a share, the mean analyst target price for VALE over the next year is $35.20.

As with so many companies, continued growth in China will be crucial for VALE, since the company is one of the biggest suppliers of iron ore to Chinese steel mills.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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