Top 5 Cheap Miners Poised to Explode

#3 SunCoke Energy Inc (NYSE:SXC)

 – Number of Hedge Fund Holders (as of September 30): 35
– Total Value of Hedge Fund Holdings (as of September 30): $169.69 million
– Hedge Fund Holdings as Percent of Float (as of September 30): 33.40%

Although SunCoke Energy Inc (NYSE:SXC) shares have retreated by 83% year-to-date as weak thermal and metallurgical coal prices weigh on the company’s coal logistics business, many hedge funds still believe in the company. Of the 730 elite funds that we track, 35 were long around 33.4% of the company’s float on September 30. The large number of funds long SunCoke, along with the company’s cheap price-to-book ratio of 0.69 makes SunCoke Energy a short squeeze candidate should any good news materialize (such as rising natural gas prices or coal prices).

#2 Barrick Gold Corporation (USA) (NYSE:ABX)

 – Number of Hedge Fund Holders (as of September 30): 40
– Total Value of Hedge Fund Holdings (as of September 30): $937.59 million
– Hedge Fund Holdings as Percent of Float (as of September 30): 12.70%

Although Barrick Gold Corporation (USA) (NYSE:ABX) is one of the leaders in the industry, its shares have not done well in 2015, with shares down by 26.89% year-to-date. Nevertheless, Barrick shareholders are in a better position than other gold investors, as analysts expect Barrick to be profitable next year and the company pays a dividend with an annual yield of 1.03%. Given Barrick’s cheap price-to-book ratio of 0.92 and forward P/E of 16.92, look for shares to surge if gold futures prices make a convincing bottom and head north again.

#1 Freeport-McMoRan Inc (NYSE:FCX)

 – Number of Hedge Fund Holders (as of September 30): 44
– Total Value of Hedge Fund Holdings (as of September 30): $1.39 billion
– Hedge Fund Holdings as Percent of Float (as of September 30): 13.80%

The weak Chinese economy is certainly having an effect on Freeport-McMoRan Inc (NYSE:FCX). Because China consumes 40% of the world’s copper production and makes up a substantial portion of crude oil growth demand, copper and crude prices have gone south as China’s economy has weakened. The lower copper and crude prices have caused Freeport-McMoRan shares to fall by almost 70% year-to-date and shares of the company now trade at 0.68-times the company’s book value. Although cheap can always get cheaper, Freeport-McMoRan Inc (NYSE:FCX) will surge if China’s economy shows signs of recovering or if Saudi Arabia pares back oil production.

Disclosure: None