QSM Asset Management disclosed a new position in Rio Tinto Group on Thursday, purchasing 174,700 shares for an estimated $11.5 million during the third quarter.
What Happened
According to a filing with the Securities and Exchange Commission released on Thursday, QSM Asset Management initiated a new position in Rio Tinto Group (RIO -0.92%), acquiring 174,700 shares. The estimated value of the transaction, calculated using the average price during the quarter ended September 30, was $11.5 million. This stake represents 8.2% of the fund’s reportable assets at the end of the quarter.
What Else to Know
Top holdings after the filing:
- NYSE:ZBH: $12.9 million (9.2% of AUM)
- NASDAQ:INTC: $12.2 million (8.7% of AUM)
- NASDAQ:VTRS: $11.6 million (8.3% of AUM)
- NYSE:RIO: $11.5 million (8.2% of AUM)
- NYSE:PFE: $11.3 million (8.1% of AUM)
As of Thursday morning, RIO shares were priced at $68.90, up 4.5% over the year ending and lagging the S&P 500 by about 9 percentage points over the same period.
Company Overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $53.7 billion |
| Net Income (TTM) | $10.3 billion |
| Dividend Yield | 5.4% |
| Price (as of Thursday morning) | $68.90 |
Company Snapshot
- Rio Tinto produces and sells iron ore, aluminum, copper, minerals, and related products.
- The company operates a vertically integrated mining and processing model, generating revenue from commodity extraction, processing, and global distribution.
- It serves industrial manufacturers, construction firms, technology companies, and energy producers worldwide.
Rio Tinto Group is a leading global mining company with a diversified portfolio across iron ore, aluminum, copper, and minerals.
Foolish Take
QSM Asset Management’s new $11.5 million stake in Rio Tinto Group is part of the fund's growing exposure to commodity-linked value plays. The position—representing 8.2% of the firm’s portfolio—adds to a broader bet on natural resources this past quarter, alongside bolstered holdings in Diamondback Energy (FANG) and Occidental Petroleum (OXY). Together, these moves suggest that QSM believes energy and materials producers remain undervalued relative to fundamentals.
Meanwhile, Rio's stock has surged more than 30% since late June. The firm's Pilbara operations posted their second-highest third-quarter shipments since 2019, climbing 6% from the second quarter. The company also reaffirmed full-year production guidance, and in a statement, CEO Simon Trott touted back-to-back quarterly production records in Rio's bauxite business and at the Oyu Tolgoi mining site in Mongolia.
For long-term investors, Rio’s combination of strong free cash flow, modest valuation, and a dividend yield of about 5.5% offers both income and inflation protection. QSM’s inclusion of Rio Tinto within a portfolio of high-quality cyclicals seemingly underscores its conviction in commodity producers amid broader economic uncertainty.
Glossary
Asset Management: Professional management of investments on behalf of clients or institutions.
Position: The amount of a particular security or asset held by an investor or fund.
Stake: The proportion of ownership or interest held in a company or asset.
Holding: A specific security or asset owned within an investment portfolio.
Reportable AUM: Assets under management that must be disclosed in regulatory filings, often above a certain threshold.
AUM (Assets Under Management): The total market value of investments managed by a fund or asset manager.
Quarterly Pricing: The average price of a security over a specific three-month financial reporting period.
Vertically Integrated: A business model where a company controls multiple stages of production and distribution within its industry.
Dividend Yield: Annual dividends paid by a company expressed as a percentage of its share price.
TTM: The 12-month period ending with the most recent quarterly report.
