1. VALE – SELL / 9/13/12 M ARK B LAZO, P ORTFOLIO M ANAGER

2. P ITCH O VERVIEW  Sell 36.591 shares @ $18.99 each  $694.86

3. V ALE  Exploration, production, and sale of basic metals in Brazil and internationally  Larget producer of iron ore in the world  Involved in fertilizers, logistics, and steel businesses  Majority of revenue from selling iron ore and nickel

4. I RON O RE I MPORTS  China 34%  Japan 23%  Germany 7.5%  Rest of World 35.5%

5. I RON O RE P RICES  Iron ore prices down 37% this year  Steepest drop among industrial commodities due to China’s slowdown

6. C HINESE S TEEL P ROFITS  Chinese steel companies saw profits decline 49.4% from a year earlier to $6.64 billion

7. C HINESE I NFRASTRUCTURE S TIMULUS  ¼ size of failed 2008-2009 Chinese stimulus  Iron ore prices will remain low, hurting margins  Stimulus now priced in to stock after 6.75% jump  Do we want to be in a sector that requires stimulus to boost demand?

8. G ROWTH AND C OMPETITION  Major competitor: BHP Billiton

9. C OMPETITORS

10. S TRENGTHS  Debt to Equity Ratio 0.34  Low debt on the books  Quick Ratio1.20  High ratio allows Vale to meet short-term cash needs

11. W EAKNESSES  Net Income -67% YoY  Weak operating cash flow  Decreasing stock price

12. O PPORTUNITIES  New infrastructure spending from Chinese government  Roads  Water ports  Airports

13. T HREATS  Countries are continually being exposed for having financial problems  Spain  Italy  Greece

14. R ECENT N EWS  On September 5 th, Vale recently postponed plans of a mining project in Canada. The mine would produce 1500 jobs and 2.9 million metric tons of potash. The reason for the cancellation of immediately starting the job is “because of decreased China demand and drought conditions in the United States. Potash is used in fertilizers and agricultural products and the agrarian industry isn’t doing well.”  The recent drought in the U.S. and lack of demand in China is causing action from Vale.

15. R ECENT N EWS  A report released on September 9th showed Japan’s economy (purchases 23% of world’s iron ore supply) slowing drastically from an estimated 1.4% growth to 0.7%  European debt crisis putting a cap on spending from businessesS  Data released on September 8 th shows smallest rise in China’s industrial output in the last three years.

16. V ALUATION  52-week change-31.9%  S&P 52-week change22.2%  Quarterly Revenue Growth-2.1%  Quarterly Earnings Growth-48.3%  Total Cash4.2BTotal Debt27.3B  Debt-Equity34%Current Ratio2.24  P/E6.75

17. S UMMARY  Sell 36.591 shares @ $18.99 each  $694.86