Aug. 14, 2008 (Bloomberg) — Cap SA, Chile’s biggest iron-ore and steel producer, rose for the first time in six days in Santiago trading after analysts said the stock was undervalued and that rising metal prices may keep boosting earnings.

     Cap climbed 1.9 percent to 18,270 pesos at 12:02 p.m. New York time after dropping 12 percent in the previous five days.

     Before today, Cap had lost a quarter of its value from a late-June peak, reducing its price-to-earnings ratio to 21 from 38, amid concern that slowing global demand will damp prices for its products at a time of earnings-per-share dilution because of a planned $550 million share sale. The Bloomberg World Iron/Steel Index rose the most in six days today and Citigroup Inc. said iron prices probably will rise 30 percent next year.

     “Cap’s fall in the last few days was strange so this looks like a rebound,” said Christian Contreras, an analyst at Banchile Inversiones. Second-quarter earnings “were pretty solid,” he said by phone from Santiago.

     Cap’s second-quarter profit more than doubled, beating analysts’ estimates, according to Bloomberg calculations based on first-half results reported Aug. 8.

     The stock’s price presents “opportunities” to buy, Cesar Perez-Novoa, a managing director at brokerage Celfin Capital in Santiago, said by phone Aug. 11. Cap is one of Banco Santander SA’s favorite stocks, analyst Francisco Errandonea said by phone from Santiago today.