Rio Tinto plc (ADR) (RTP)

Rio Tinto....I'll be honest, I had never actually heard about this company until about a month ago. I was doing usual monthly search for a new investment, and I think this is a solid recommendation for the CAPS community.

I was actually shocked that I found a stock at such an incredible value. With a PE of around 12, a 2 percent dividend payout, and the stock being about 25% off from its 52 week high with no meaningful cause, I thought why not?

I attribute much of the sell off to profit takers. Many have been getting rid of precious metals stocks or stocks related to that market sector for the last 6 months or so. However, this is a diversified company that mines many other types of metals and minerals used by industry and in construction.

Not to beat a dead horse, but I look for this company to benefit significantly from the industrial and commercial expansion of India and China. I love boring companies, but I also love companies selling products that people always need. People always need food, water, clothing, and shelter (commercial, industrial, and residential)....and this company falls under the shelter category...or at least a means to shelter.

This is a solid company with much more to offer than gold.

If you are buying this stock in hopes to strike it rich, you are in for a sad surprise, you would a better chance convincing Wilie Wonka to drill for chocolate in a vegetable field!

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]

Rio Tinto is a mining company with its primary operations in North America and Australia. They are the 3rd largest producer of uranium and the 2nd largest producer of iron. Rio Tinto just finished an agreement to acquire 20% of Ivanhoe Mines. With the price of precious metals and uranium skyrocketing, Rio Tinto will go nowhere but up!

Price drop of 84% ytd, yet yield of 9% makes taking risk worth the

reward, plus get paid to wait. RTP has extensive debt, but should be able to work through it with a combination of approaches; not too

dilutive of stock price.

I think current inflation data is not so good news for metals and other commodities in general. I also think the market realizes the Fed is serious about combatting inflation and that it is going to take more than just one or even more report of benign inflation data to make them alter their imho bias toward tightening. They will per Bernanke's claim to fame wait until they hit inflation level targets even if this is not formal policy at this time.

We're also seeing many attempts world-wide to slow growth with rate increases in Europe, Japan, China, Korea, etc. as well as many of the emerging markets raising reserve requirements to pull liquidity of the system to slow things down. Wait for the commodities bust before buying back in.

Metals are a hot sector. RTP recently got a buyout offer from Chinalco, Alcoa. 5*

Part of the attraction to this stock is the hit in price it has taken over the past twelve months. When revenues stop growing during a recession, other factors must be looked at to determine the health of the company. Margins seem to have been maintained. An enormous acquisition of 37B in 2007 and an investment four times larger in R&D show confidence by company management. If this company produces similar profit to revenues as last year, it will easily make the trip back to those levels. With a potential boost from its new business, it may even surpass them.

After watching Rio Tinto closely for the last month or two, I've noticed that as soon as RTP's price starts going up significantly that certain analysts start bad-mouthing or lowering the rating of RTP. It's almost like they don't want us to invest in RTP's stock, yet the price keeps going higher. Was it yesterday or the day before it broke through it's First Resistance? Now it's First Resistance is $290.02.

As soon as even an inkling of an agreement with Chinalco is announced, I think RTP is going to surge. Remember, RTP has $39 billion in debt, but they stated they were going to pay off only $10 billion in 2009. If the deal goes through with Chinalco, that deal will be way over $10 billion.

Anyone want to bet they'll announce a deal with Chinalco before their next week's statement?

BTW, I'm just a greenhorn trader with a lot to learn so don't shoot me down too hard. ; )

Metals will recover with the economy and Rio Tinto has most of them.

In the long run, Earth is running out of resources. So, basic materials are going to become more valuable as time passes.Nice dividend is enough for me to see it through... Buy this ! You won't regret it in a year or so... !

Well diversified, 'risk aware, not risk averse' mining company. Currently all miners are doing well, but this one will be able to survive the downturns.

Rio Tinto plc and Rio Tinto Limited operate as one business organization (Rio Tinto). Rio Tinto is an international mining company. The Company's principal product and global support groups include Iron Ore, Energy, Industrial Material, Aluminium, Copper, Diamonds, Exploration and Technology. Rio Tinto�s Iron Ore group comprises iron ore operations in Australia, Canada and Brazil and development projects in Guinea (West Africa) and India. The Rio Tinto Energy Group comprises uranium, thermal coal and coking coal operations. Rio Tinto's Industrial Minerals group produces borates, talc, industrial salt, and titanium dioxide feedstock. Rio Tinto Aluminium is an integrated product group with operations in Australia, New Zealand and the United Kingdom. Rio Tinto's Copper group comprises Kennecott Utah Copper in the United States and interests in the copper mines of Escondida, Grasberg, Northparkes, Palabora Mining Company (Palabora) and the Resolution Copper project.

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MINERALS

Like the international diverse exposure to mining. Good dividend and inflation hedge. Once the industrial sector picks up, demand for ores will increase.

Soon to be the Exxon of mining stocks. I'll start worrying about it when China and India decide to stop building.

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The long term trend is still for growth for those companies that supply the raw materials to BRIC and for that matter to the rest of the world.

market leader, efficent well run and mmining is undervalued and over demanded and it has a good uraniumn play