Rio Tinto plc (ADR) (RTP)

Zacks Rank 3-Hold, Recommend Neutral, Industry Rank 173 / 217, Target: 190.00, Avg Target of 14 analysts 192.50

in great position flush with cash

ressources golden cycle continues

Commodities rule

The prices of raw materials should enjoy a very positive tide from improving world economies and increased money supply/price inflation. RTP at $80, $100 and at $160 have been great entry points so far.

As the dollar weakens and the economies of the world get back on track the long term outlook for companies like rio Tinto look VERY rosy.

This is the poster child of diversified commondity companies

Cheap, plus the right kind of assets metals-wise here.

With chinas refusal to sign a deal in 2008 now there paying 50% more for the iron ore since they are trying to pressure BHP with arresting some of the top execs. with spying. Now with paying 110 Metic ton instead of 50 some there hurting themself but have not yet backed down and released the execs. So for the future i believe you will see Vale,BHP and RTP go up in value

China

On the thesis of future inflation from all the new sovereign debt floating around, getting long commodities is one of the safer trades out there. Not only have prices found a bit of a floor since their falloff in late 2008, but there is also the upside potential for prices to increase. When it comes to miners, its all about size, and there is no question RTP is one of the biggest and baddest. Size allows for more research and discovery, which leads to more reserves, which not only gives these companies more inventory to sell, but the flexibility to cultivate fields as economic conditions change. Smaller companies can't afford to table a site if the extraction yields are low, RTP can wait until prices make these sites cost-effective, and better margins on average.

Acquired rights to one of the richest iron ore sites on globe. If they end up getting full 100% the better. Emerging economies, China, India will keep demand for steel rising.

Going with a gut feeling that metals will do well in the near-term. The SlowStochastics indicate this one is moving up; hopefully, it's not a dead-cat bounce. Still, with a forward P/E of only 11.4, an Operating Margin of 27% and RoE of 14.4%, things go be looking up for the mining group. Items of concern to me are the anemic profit margin (4.5%) and the negative quarterly revenue & earnings growth rates (-22.4% & -45.4%, resp.). Debt is currently at $39.4B, which is a little less than their market cap of $46.6B (with a Current Ratio of about 0.9), but debt is a fact of life in the mining industry, so I'm not as worried about this, though obviously the lower the debt load, the easier it will be for RTP to improve its bottom line. I'm ranking this as a Marginal Thumbs-Up.

[Source: Yahoo! Finance]

Its consolidating by selling off parts of company.

This portfolio tracks the performance of good vs. evil companies.

Evil elements:
- Complicity in or direct violations of environmental, labor and human rights in Indonesia, Papua New Guinea, Philippines, Namibia, Madagascar, the United States and Australia, among others.

Including:

- Eviction of the local small scale miners in the Kelian gold mine in Borneo. The families were displaced to shanty towns. Followed up in the area with a culture of sexual harassment and rape centered around the company. An independent inquiry determined that victims of sexual abuse had been threatened with dismissal if they did not cooperate or were promised a job or money in return for sex. Rio Tinto didn't inform their shareholders of this finding. (here) and (here)

- In the 70s supported the apartheid government of South Africa through uranium mining operation in Namibia that the UN called 'virtual slave labour under brutal conditions'. These operations, by admission of the company chairman maintained a 'private army' for the purposes of suppressing civil or labour unrest. (here) Keeping large gun happy security forces that are accused of everything between intimidation and outright targetted murder of opposition leaders in communities near Rio Tinto concerns is a practice the company still maintains today.(here)

- Their attempt at greenwashing includes both the typical aesthtic use of landscapes that they are actually in the process of despoiling and also the coining of the oxymoron 'sustainable mining'. (here)

- Under their subsidiary 'Bougainville Copper ltd', through pollution (they dumped the toxic tailings from their mine directly into the main river) and disregard for the local community whilst giving significant amounts of money to the central government they were instrumental in bringing about a full secessionary war in Bougainville in Papua New Guinea. (here) and (here) The area has been completely destabilised for around 40 years now.

We should see RTP to trade above $250-290 next 3-6 months.

Strong buy rtp

Everyone needs the resources they produce - when manufacturing restarts, Rio will surge past

Demand from china will continue with strong recovery in 2010

Strong rise after the economy recovers. This could take from two to five years. Will head north as some point in time.