Vale’s profit outlook lures big investors including Stan Druckenmiller

Date: Nov 21, 2017
Hedge funds and other big investors piled into Vale SA in the third quarter as the world’s biggest iron-ore producer heads for its most profitable year since 2013.

Funds bought a combined 470 million American depositary receipts in the Brazilian company, according to filings compiled by Bloomberg as of November 15. It was their second biggest increase in position in the materials sector.

Billionaire investor Stan Druckenmiller’s Duquesne Family Office LLC added Vale, with the purchase of ADRs that were valued at $US25 million by September 30, a filing showed on Tuesday. Arrowstreet Capital Partnership and Two Sigma Advisers LP were also Vale buyers last quarter.

The Rio de Janeiro-based company is churning out record amounts of high-grade ore that produce less emissions in the steel-making process at a time China is seeking to lower pollution levels. With premiums for top-shelf ore rising, Vale is expected to post $US14.5 billion in earnings before interest, taxes, depreciation and amortisation this year, the most since 2013, according to the average estimate of analysts tracked by Bloomberg.

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