Buy Signal on Rio Tinto (RIO-GB)
Our system also triggered a bullish Tactical signal on November 26, that led to a bullish acceleration. Rio Tinto has a rather strong track record, with a Behavioral score of 9/10, therefore the bullish signal is to be considered as mainly Strategic.
Rio Tinto has a € 67.3 Bn market cap, and one of the world's leaders in mining research, prospecting and operating. Revenues are derived from 1/ iron ore (65%) consisting on 285.9 Mt produced in 2020; 2/aluminum, alumina and bauxite (21%) : 56.1 Mt bauxite, 8 Mt alumina and 3.2 Mt aluminum produced ; 3/industrial minerals (5%) including titanium dioxide pigments (1,120 Kt produced), borates (480 Kt produced) and salts (4.9 Mt produced) ;4/ copper (4%) and 5/ gold and diamonds (2%).
Rio Tinto offers one of the highest exposure to Chinese and Asian industrial demand in the equity market. Given China’s 58% share of Rio Tinto’s revenue and its competitive positioning at the core of the world’s industrial supply chain, the greatest risk facing the Rio Tinto investment case is Chinese trade tensions.
The coming global infrastructure boom and energy transition are strong drivers for Rio Tinto.
For 2021, the company is expected to post a $62 Bn revenue coupled with a $21.5 Bn net profit. The dividend yield currently stands at 13%.
Short term catalyst : Reflation, Chinese economy.
This signal looks consistent with the bullish momentum currently active on the European Basic Resources sector. There is currently 77% of Basic Resources stocks in bullish tactical signal and 65% in bullish strategic signal.