In this article, we discuss the 10 best copper stocks to buy now.
Copper is on track to become the new gold as the gap between supply and demand widens. According to a prediction by Bank of America, the price of copper could climb to $20,000 per metric ton within the next three years. However, the copper industry has been hit in recent weeks as the US prepares to lift interest rates, sending the price of the dollar surging and reducing the demand for the metal. In a double blow to the industry, China has announced that it will release the metal from national reserves in a bid to control commodity prices.
These developments have hit the copper industry that was on a bull run following the rise in demand for the metal as the economy reopened following the pandemic lockdowns. Copper is used in many electrical products like wires, motors, mobile devices, and others. It is also used in consumer ware and interior components of housing. Lately, as the demand for electric vehicles rises, copper is rapidly being consumed as it offers durability, high conductivity and efficiency, and is used in EV vehicles, charging stations, and other EV-related products.
Some of the companies that are at the forefront of copper production and could cash in on the expected boom for the metal in the long-term include Freeport-McMoRan Inc. (NYSE: FCX), Rio Tinto Group (NYSE: RIO), and Newmont Corporation (NYSE: NEM). In February, Freeport-McMoRan Inc. (NYSE: FCX) CEO Richard Adkerson announced that the firm was seeking to approve expansions at US-based copper mines to keep up with the surging demand, especially as copper was a central product for the new climate projects of the US government.
Meanwhile, Rio Tinto Group (NYSE: RIO), the United Kingdom-based mining firm, posted its biggest annual profit since 2011 in February as rising metals prices boosted revenue. It also declared the biggest dividend in its almost 15-decade-long history, totaling over $9 billion in payments to shareholders for 2020. Although this rise in earnings is largely attributed to the soaring price of iron, which accounts for more than 90% of the total earnings, the surge in copper prices also gave a firm push as it delivered a record quarter at the end of 2020.
Newmont Corporation (NYSE: NEM), the largest gold mining firm in the world, has also benefited from the copper business over the past few months. In April, the firm was named among the highest convictions picks for the second quarter by Bank of America. The company beat market expectations on earnings per share for the fourth quarter of 2020 even as gold production fell because of rising prices. In February, the firm hiked the quarterly dividend payment by a whopping 38%.
It remains to be seen how these companies weather the bear tailwinds in the coming months. Stock volatility in the past few years has pummeled entire investment portfolios in the past few years. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Photo by Ricardo Gomez Angel on Unsplash
With this context in mind, here is our list of the 10 best copper stocks to buy now. These were selected keeping in mind annual copper production, hedge fund sentiment, and the business fundamentals underlying each company.
Best Copper Stocks to Buy Now
10. Barrick Gold Corporation (NYSE: GOLD)
Number of Hedge Fund Holders: 49
Barrick Gold Corporation (NYSE: GOLD) is a mining firm that focuses on the extraction and development of gold and copper. It has operations in more than 10 countries around the world. It is placed tenth on our list of 10 best copper stocks to buy now. The stock has offered investors returns exceeding 2.8% over the past three months. In the first quarter of 2021, a surge in prices helped the firm with a 31% quarter-to-quarter increase in revenue from copper mines in Chile, Saudi Arabia and Zambia.
On June 4, Barrick Gold Corporation (NYSE: GOLD) Mark Bristow told the media that the company hoped to restart a mining operation in Papua New Guinea (PNG) under a new deal that would exploit the resources in the operation under a joint venture with PNG stakeholders.
At the end of the first quarter of 2021, 49 hedge funds in the database of Insider Monkey held stakes worth $1.3 billion in Barrick Gold Corporation (NYSE: GOLD), down from 53 the preceding quarter worth $1.7 billion.
Just like Freeport-McMoRan Inc. (NYSE: FCX), Rio Tinto Group (NYSE: RIO), and Newmont Corporation (NYSE: NEM), Barrick Gold Corporation (NYSE: GOLD) is one of the best copper stocks to buy now.
In its Q4 2020 investor letter, GoodHaven Capital Management, an asset management firm, highlighted a few stocks and Barrick Gold Corporation (NYSE: GOLD) was one of them. Here is what the fund said:
“Barrick’s recent results have been consistent with our expectations. Barrick has begun inching up the dividend as planned, which should continue increasing absent them finding a large acquisition (they want more copper assets) or a materially lower price of gold. We’d also expect periodic special dividends during stronger gold price environments. At current gold prices we estimate normalized free cash flow at Barrick of over $1.60/share. The company is now about net-debt free. We see plenty of upside and absent a collapse in gold not too much downside. Missing from much of the public discussions about gold, but potentially interesting, is the supply/demand backdrop. As the Wall Street Journal (8/16/20) recently said “gold is amongst the rarest metals in the earth’s crust and much of the easier to get to ore has already been mined. What is left is harder to find and more expensive to extract…” According to the World Platinum Council, it was forecasted that there will be a supply and demand imbalance of 1.2 million ounces globally. The potential macro tailwinds that could add value to an alternate currency like gold including currency concerns, excessive debt and continuing negative real interest rates are still out there. While the shares performed well for the year they were weak in the second half and now stand more attractively priced.”
9. Teck Resources Limited (NYSE: TECK)
Number of Hedge Fund Holders: 30
Teck Resources Limited (NYSE:TECK) is a natural resources firm that engages in the mining of copper, zinc, and other metals. It is ranked ninth on our list of 10 best copper stocks to buy now. The stock has returned more than 102% to investors in the past twelve months. The firm has mining interests in many countries, including Australia, Chile, Ireland, Mexico, Peru, Turkey, and the United States, among others. The firm is one of the biggest copper producers in the world with copper mines in Canada and South America.
On May 26, investment advisory Deutsche Bank upgraded Teck Resources Limited (NYSE:TECK) stock to Buy from Hold with a price target of $30 on the back of growth potential with regards to the QB2 copper project and the returns it promised in the medium term.
Out of the hedge funds being tracked by Insider Monkey, Boston-based investment firm Arrowstreet Capital is a leading shareholder in Teck Resources Limited (NYSE:TECK) with 9.3 million shares worth more than $179 million.
Just like Freeport-McMoRan Inc. (NYSE: FCX), Rio Tinto Group (NYSE: RIO), and Newmont Corporation (NYSE: NEM), Teck Resources Limited (NYSE:TECK) is one of the best copper stocks to buy now.
8. Vale S.A. (NYSE: VALE)
Number of Hedge Fund Holders: 31
Vale S.A. (NYSE: VALE) is a metals mining company that concentrates on the production of iron ore, nickel, and other metals. The firm is one of the largest ones in Brazil and markets logistical services related to these metals in addition to mining and development. It is placed eighth on our list of 10 best copper stocks to buy now. The company’s shares have returned more than 109% to investors over the past twelve months. Last year, the firm produced almost 360,000 metric tons of copper.
On June 4, Vale S.A. (NYSE: VALE) halted production at two mines in the Minas Gerais region of Brazil after local officials evacuated people from nearby the site of Xingu dam. Brazilian officials have said that the dam is close to collapsing but Vale disputes this.
Out of the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Vale S.A. (NYSE: VALE) with 38 million shares worth more than $661 million.
Just like Freeport-McMoRan Inc. (NYSE: FCX), Rio Tinto Group (NYSE: RIO), and Newmont Corporation (NYSE: NEM), Vale S.A. (NYSE: VALE) is one of the best copper stocks to buy now.
7. BHP Group (NYSE: BHP)
Number of Hedge Fund Holders: 18
BHP Group (NYSE: BHP) is an Australian natural resources firm with interests in petroleum, copper, iron, and coal. The firm owns a copper mine in Chile, as well as other copper-related assets elsewhere. It produced more than 1.3 million tons of copper in 2020. The firm owns a copper mine in South Australia. It is ranked seventh on our list of 10 best copper stocks to buy now. The stock has returned more than 43% to investors over the past year.
On June 11, BHP Group (NYSE: BHP) shares jumped close to 1% as the firm announced that workers at a copper mine in Chile had accepted work contracts, putting an end to rumors about a strike that could have hit the mine and global copper production.
Out of the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in BHP Group (NYSE: BHP) with 7.9 million shares worth more than $553 million.
Just like Freeport-McMoRan Inc. (NYSE: FCX), Rio Tinto Group (NYSE: RIO), and Newmont Corporation (NYSE: NEM), BHP Group (NYSE: BHP) is one of the best copper stocks to buy now.
6. Turquoise Hill Resources Ltd. (NYSE: TRQ)
Number of Hedge Fund Holders: 13
Turquoise Hill Resources Ltd. (NYSE: TRQ) is a mineral exploration and development company. It is placed sixth on our list of 10 best copper stocks to buy now. The stock has returned more than 142% to investors in the past twelve months. The company concentrates on operations related to copper, gold, and silver. In 2020, the firm produced 149,631 tons of copper, beating guidance of 140,000 tons.
On May 12, Turquoise Hill Resources Ltd. (NYSE: TRQ) posted earnings results for the first quarter of 2021, reporting earnings per share of $1.18, beating market expectations by $0.63. The revenue over the period was more than $520 million, up 302% year-on-year.
At the end of the first quarter of 2021, 13 hedge funds in the database of Insider Monkey held stakes worth $575 million in Turquoise Hill Resources Ltd. (NYSE: TRQ), up from 12 in the previous quarter worth $374 million.
Just like Freeport-McMoRan Inc. (NYSE: FCX), Rio Tinto Group (NYSE: RIO), and Newmont Corporation (NYSE: NEM), Turquoise Hill Resources Ltd. (NYSE: TRQ) is one of the best copper stocks to buy now.
5. Hudbay Minerals Inc. (NYSE: HBM)
Number of Hedge Fund Holders: 15
Hudbay Minerals Inc. (NYSE: HBM) is ranked fifth on our list of 10 best copper stocks to buy now. The company’s shares have returned more than 116% to investors in the past year. It is a Canadian mining firm that focuses on producing copper and zinc. It operates in North and South America. The company has mined for precious metals in the Flin Flon area of Manitoba for over nine decades. The area has reserves of copper, zinc, gold, and silver.
On April 6, investment advisory Bank of American upgraded Hudbay Minerals Inc. (NYSE: HBM) stock to Buy from Underperform with a price target of $9.5 on the back of improved outlook for the copper business and an expected rise in prices of the metal.
Out of the hedge funds being tracked by Insider Monkey, Atlanta-based investment firm GMT Capital is a leading shareholder in Hudbay Minerals Inc. (NYSE: HBM) with 37 million shares worth more than $259 million.
4. Newmont Corporation (NYSE: NEM)
Number of Hedge Fund Holders: 43
Newmont Corporation (NYSE: NEM) is the largest gold mining company in the world. It also has interests in other metals, like copper and zinc. In addition to the United States, the firm operates in Canada, Mexico, Dominican Republic, Peru, Suriname, Argentina, Chile, Australia, and Ghana, among other countries. In 2020, the firm produced more than 56 million pounds of copper, a slight dip from the previous year as the COVID-19 hit. In 2019, copper production was close to 79 million pounds. It is placed fourth on our list of 10 best copper stocks to buy now.
On May 17, Newmont Corporation (NYSE: NEM) was one of the top performing stocks of the day as it gained close to 5% amid an overall bull run for the gold and mining industry at the stock market. Gold prices hit their year-to-date high in mid-May, before sliding in the weeks after.
At the end of the first quarter of 2021, 43 hedge funds in the database of Insider Monkey held stakes worth $994 million in Newmont Corporation (NYSE: NEM), down from 50 in the preceding quarter worth $1.2 billion.
In its Q1 2020 investor letter, First Eagle Investment Management, an asset management firm, highlighted a few stocks and Newmont Corporation (NYSE: NEM) was one of them. Here is what the fund said:
“The gold price helped support the stock price of Newmont Corporation, a Colorado-based miner with, in our view, highquality assets located in favorable mining jurisdictions in North America, South America, Australia and Africa. With what we consider an impressive portfolio of assets, strong management team, solid balance sheet and history of generating free cash flow, Newmont appears well positioned to withstand the economic disruptions related to the coronavirus pandemic.”
3. Rio Tinto Group (NYSE: RIO)
Number of Hedge Fund Holders: 25
Rio Tinto Group (NYSE: RIO) is the second largest metals and mining corporation in the world with interests in copper, aluminum, gold, silver, and other metals. It is ranked third on our list of 10 best copper stocks to buy now. The stock has returned more than 46% to investors in the past year. In 2020, the firm produced almost 527,900 metric tons of copper. The company also has significant mining operations related to uranium and iron.
On June 15, Rio Tinto Group (NYSE: RIO) announced that it would be partnering with an Australian firm to explore the usage of hydrogen instead of natural gas in metal refineries. The move is part of a plan by the company to reduce overall fossil fuel emissions.
Out of the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Rio Tinto Group (NYSE: RIO) with 12.5 million shares worth more than $971 million.
2. Freeport-McMoRan Inc. (NYSE: FCX)
Number of Hedge Fund Holders: 68
Freeport-McMoRan Inc. (NYSE: FCX) is an American mining company that explores and mines for copper, gold, silver, and other metals. The firm runs seven open-pit copper mines in North America, located in Morenci, Bagdad, Safford, Sierrita and Miami, Chino and Tyrone. It is placed second on our list of 10 best copper stocks to buy now. The stock has returned more than 233% to investors in the past twelve months.
On May 27, Freeport-McMoRan Inc. (NYSE: FCX) CEO Richard Adkerson told news publication Bloomberg that copper was a long-term and extraordinarily strong business that would benefit from substitution and increased recycling as large copper mines were rare to find.
At the end of the first quarter of 2021, 68 hedge funds in the database of Insider Monkey held stakes worth $3.2 billion in Freeport-McMoRan Inc. (NYSE: FCX), down from 71 in the preceding quarter worth $2.6 billion.
1. Southern Copper Corporation (NYSE: SCCO)
Number of Hedge Fund Holders: 27
Southern Copper Corporation (NYSE: SCCO) is a Mexico-based mining company that focuses on the production of copper. It is ranked first on our list of 10 best copper stocks to buy now. The company’s shares have offered investors returns exceeding 64% in the past twelve months. Copper products account for more than 80% of the total sales value at the firm. In 2019, the company mined 993,822 tons of copper.
Southern Copper Corporation (NYSE: SCCO) is a solid option for income investors. On May 7, the company declared a quarterly dividend of $0.70 per share, an increase of almost 17% compared to the previous dividend. The forward yield was 3.85%.
Out of the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Southern Copper Corporation (NYSE: SCCO) with 3.9 million shares worth more than $270 million.
You can also take a peek at Billionaire Stan Druckenmiller’s Top 10 Stock Picks and Billionaire Julian Robertson On Interest Rates and His Top Stock Picks For 2021.
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Disclose. None. 10 Best Copper Stocks to Buy Now is originally published on Insider Monkey.
