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Is the Rio Tinto Limited (ASX:RIO) share price in the buy zone?

Last month the Rio Tinto Limited (ASX: RIO) share price fell almost 3% due to the market volatility and concerns over the impact that global trade wars could have on demand for commodities.

This decline means that the mining giant’s shares have now fallen over 12% from their 52-week high of $87.09.

Is it time to invest?

While my preference continues to be rival BHP Billiton Limited (ASX: BHP), Rio Tinto isn’t far behind and I would consider it a good option for investors looking for exposure to the resources sector.

Especially given the fact that its shares currently provide a trailing fully franked 5.2% dividend and the miner recently embarked on a $3.2 billion share buy-back programme.

But I’m not the only one that sees Rio Tinto as a buy. According to a change of director’s interest notice which was released this morning, independent non-executive director, Megan Clark AC, has been buying shares this week.

The director picked up 530 shares through an on-market trade on Monday at an average price of $74.66 per share. This equates to a total consideration of approximately $39,570.

In addition to this, a number of brokers have recently reaffirmed their buy ratings on the company’s shares.

Notes out of Citi and UBS reveal that they have buy ratings and $90.00 price targets, whereas a note out of Macquarie Group Ltd (ASX: MQG) shows that its equity analysts have an outperform rating and $92.00 price target currently. Macquarie’s price target implies potential upside of over 20% excluding dividends.

The latter was pleased with its solid production in the September quarter and believes that strong commodity prices offer potential upside to its current capital management programme.

I agree with this view and think there’s every chance of another buy-back or special dividend being announced with its FY 2019 results if commodity prices remain favourable.

All in all, I would class Rio Tinto as a share to buy in the resources sector alongside fellow giant BHP Billiton.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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