Topic: How To Invest

Hi Pat: Would you recommend Rio Tinto at its current price?

Article Excerpt

Rio Tinto plc (ADR), $57.26, symbol RIO on New York (ADRs outstanding: 1.4 billion; Market cap: $78.4 billion; www.riotinto.com), is a major international mining group. The U.K.-based company locates, develops, mines and processes a range of minerals, including aluminum, copper and diamonds. It also produces commodities for power generation, like coal and uranium, and industrial minerals, such as borax, titanium dioxide and salt. Rio Tinto operates across the globe, with a significant concentration in Australia and North America. It has 71,220 employees. The company is well positioned for a recovery in commodity markets when the U.S., Chinese and other global economies rebound. Meanwhile, it has cut its costs, selectively scaled back its capital spending and sold some non-essential assets to conserve cash and strengthen its balance sheet. The stock trades at 6.8 times this year’s forecast cash flow of $8.45 a share. It yields 3.0%. Rio Tinto is a high-quality international mining stock, and it’s okay to hold. …