Traders Purchase High Volume of Vale Call Options (NYSE:VALE)

Key Points

• Vale S.A. experienced a significant rise in options trading, with investors purchasing 57,702 call options, a 63% increase from the average volume.
• Analyst ratings for Vale have been mixed, with some firms raising target prices and ratings, while others, like Zacks Research, cut their rating to "strong sell."
• Vale recently announced a semi-annual dividend of $0.3417 per share, resulting in a dividend yield of 740.0% and a payout ratio of 59.35%.

Vale S.A. (NYSE:VALE - Get Free Report) saw unusually large options trading on Wednesday. Investors purchased 57,702 call options on the stock. This is an increase of approximately 63% compared to the average volume of 35,497 call options.

Analyst Ratings Changes

Several analysts have issued reports on VALE shares. Scotiabank raised Vale from a "sector perform" rating to a "sector outperform" rating and set a $14.00 target price on the stock in a research report on Thursday, September 18th. Barclays increased their target price on Vale from $13.50 to $13.70 and gave the company an "overweight" rating in a research report on Thursday, September 18th. Clarkson Capital started coverage on Vale in a research report on Wednesday, September 3rd. They set a "buy" rating and a $12.00 target price on the stock. Zacks Research cut Vale from a "hold" rating to a "strong sell" rating in a research report on Tuesday, September 9th. Finally, JPMorgan Chase & Co. decreased their price objective on Vale from $15.00 to $13.50 and set an "overweight" rating for the company in a report on Thursday, September 4th. Seven investment analysts have rated the stock with a Buy rating, four have assigned a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat.com, the company presently has an average rating of "Moderate Buy" and an average target price of $11.93.

Hedge Funds Weigh In On Vale

A number of hedge funds have recently made changes to their positions in the company. GAMMA Investing LLC grew its position in shares of Vale by 787.8% in the first quarter. GAMMA Investing LLC now owns 20,499 shares of the basic materials company's stock valued at $2,054,000 after purchasing an additional 18,190 shares in the last quarter. Rhumbline Advisers increased its position in shares of Vale by 25.9% during the first quarter. Rhumbline Advisers now owns 166,125 shares of the basic materials company's stock worth $1,658,000 after purchasing an additional 34,185 shares in the last quarter. Merit Financial Group LLC increased its position in Vale by 44.4% in the 1st quarter. Merit Financial Group LLC now owns 20,847 shares of the basic materials company's stock valued at $208,000 after acquiring an additional 6,412 shares during the period. RFG Advisory LLC purchased a new stake in shares of Vale during the 1st quarter worth approximately $140,000. Finally, Foster Group Inc. purchased a new stake in Vale in the 1st quarter valued at approximately $137,000. Institutional investors and hedge funds own 21.85% of the company's stock.

Vale Price Performance

Shares of NYSE:VALE traded up $0.10 during trading on Wednesday, reaching $10.96. 21,598,050 shares of the company's stock traded hands, compared to its average volume of 35,671,223. Vale has a fifty-two week low of $8.06 and a fifty-two week high of $12.05. The company has a quick ratio of 0.85, a current ratio of 1.22 and a debt-to-equity ratio of 0.48. The firm has a market cap of $49.72 billion, a PE ratio of 8.91 and a beta of 0.79. The company has a 50-day simple moving average of $10.28 and a 200-day simple moving average of $9.82.

Vale (NYSE:VALE - Get Free Report) last posted its earnings results on Thursday, July 31st. The basic materials company reported $0.50 EPS for the quarter, beating analysts' consensus estimates of $0.34 by $0.16. Vale had a return on equity of 18.14% and a net margin of 14.23%.The firm had revenue of $8.80 billion for the quarter, compared to analysts' expectations of $9.54 billion. As a group, analysts predict that Vale will post 1.85 earnings per share for the current year.

Vale Cuts Dividend

The company also recently announced a semi-annual dividend, which was paid on Wednesday, September 10th. Shareholders of record on Wednesday, August 13th were issued a dividend of $0.3417 per share. The ex-dividend date of this dividend was Wednesday, August 13th. This represents a dividend yield of 740.0%. Vale's dividend payout ratio is presently 59.35%.

About Vale

Vale SA, together with its subsidiaries, produces and sells iron ore and iron ore pellets for use as raw materials in steelmaking in Brazil and internationally. The company operates through Iron Solutions and Energy Transition Materials segments. The Iron Solutions segment produces and extracts iron ore and pellets, manganese, and other ferrous products; and provides related logistic services.

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