Rio Tinto - The hole story

A few weeks ago I published one of my regular FTSE 100 value trawls on Fool.co.uk and within the lowest-forecast-P/E net, a number of big miners were caught, six out of the ten in fact, and thus this sector dominated the table. Quite a remarkable showing by one sector and telling us that, at least as far as P/E is concerned, the market most definitely does not like 'holers' right now.

Looking down that list in ascending order, the first mining share that superficially I like the look of is Rio Tinto. Its forecast earnings per share (eps) for the year to 31 December 2011 is 557p, so with the shares at 3,373p the forward P/E is 6.1. Now that's cheap. And looking ahead to 2012, the analyst consensus is presently 575p, making the share a bit cheaper still on a P/E of 5.9 -- though bear in mind that the further ahead the forecast, the less reliable it must be.