In this article, we discuss 10 precious metal stocks to buy according to Ken Fisher.
Ken Fisher, the billionaire chief of Fisher Asset Management, is known for his belief in capitalism. Ken Fisher believes that demand and supply are the only determinants when it comes to pricing stocks. Ken Fisher advises investors to purchase securities for the long-term, and hold a portfolio of companies with solid growth prospects.
In the fourth quarter of 2021, the 13F portfolio of Fisher Asset Management was worth $178.5 billion, with a top ten holdings concentration of 31.58%. Investments are concentrated in the materials, information technology, industrials, healthcare, finance, communications, and energy sectors.
The securities filings for Q4 2021 reveal that the biggest buys of Ken Fisher were Apple Inc. (NASDAQ:AAPL), Advanced Micro Devices, Inc. (NASDAQ:AMD), and Microsoft Corporation (NASDAQ:MSFT), while his fund slashed stakes in Walmart Inc. (NYSE:WMT), The Walt Disney Company (NYSE:DIS), and Visa Inc. (NYSE:V).
The most notable stocks in Fisher Asset Management’s Q4 portfolio include Amazon.com, Inc. (NASDAQ:AMZN), PayPal Holdings, Inc. (NASDAQ:PYPL), and NVIDIA Corporation (NASDAQ:NVDA), among others discussed in detail.
Ken Fisher of Fisher Asset Management
Our Methodology
We used the fourth quarter portfolio of Ken Fisher for this analysis, selecting the precious metals stocks to buy according to the billionaire. We have mentioned the hedge fund sentiment around the holdings, as well as the available analyst ratings for the securities.
Precious Metals Stocks to Buy According to Ken Fisher
10. Century Aluminum Company (NASDAQ:CENX)
Number of Hedge Fund Holders: 19
Century Aluminum Company (NASDAQ:CENX) is a Chicago-based aluminum firm that produces standard and value-added aluminum products in the United States and Iceland. It is one of the leading producers of aluminum in the United States.
Securities filings for the reporting period Q4 2021 reveal that Ken Fisher boosted his stake in Century Aluminum Company by 4%, holding 2.4 million shares worth close to $40 million.
Century Aluminum Company reported its fourth quarter results on February 24, posting GAAP earnings per share of $0.59, above consensus by $0.64. The stock has gained 29% in the last month, as aluminum surged amid the Russia-Ukraine war.
Riley analyst Lucas Pipes raised the price target on Century Aluminum Company to $30 from $19 and kept a Buy rating on the shares on March 2. The analyst noted that while the volume guidance came in slightly lower than expected, he elevated the price target for Century Aluminum Company given an elevated aluminum price deck.
Among the hedge funds tracked by Insider Monkey, 19 funds were bullish on Century Aluminum Company at the end of the fourth quarter, up from 15 funds in the prior quarter. Robert Bishop’s Impala Asset Management is a significant shareholder of the company, with 1.3 million shares worth over $22 million.
In addition to Amazon.com, Inc., PayPal Holdings, Inc., and NVIDIA Corporation, Century Aluminum Company is a notable holding in Ken Fisher’s Q4 portfolio.
9. Southern Copper Corporation (NYSE:SCCO)
Number of Hedge Fund Holders: 19
Southern Copper Corporation (NYSE:SCCO) is a mining and exploration company from Phoenix, Arizona, engaged in the production of refined silver, gold, copper, and other precious metals. The company primarily conducts its mining and extraction in locations across Peru, Mexico, Argentina, Ecuador, and Chile.
In its fourth quarter 13F filings, Fisher Asset Management disclosed owning 3.5 million shares of Southern Copper Corporation, worth $221.8 million, accounting for 0.12% of the total holdings for the period.
Southern Copper Corporation declared a $1.00 per share quarterly dividend on February 7, in line with previous. The dividend was paid on March 2, to shareholders of record on February 15. The stock yields 5.27% as of March 21.
On March 14, Southern Copper Corporation slumped almost 7% as its chairman, German Larrea Mota Velasco, sold 100,000 shares of the company at $74.93 per share. The transaction amounted to approximately $7.5 million. Overall, the stock has gained 13.56% over the last month amid higher demand for precious metals.
According to the Q4 database of Insider Monkey, 19 hedge funds were long Southern Copper Corporation, compared to 23 funds in the prior quarter. Israel Englander’s Millennium Management is one of the largest shareholders of the company, with 1.2 million shares worth $78.4 million.
8. BHP Group Limited (NYSE:BHP)
Number of Hedge Fund Holders: 21
BHP Group Limited (NYSE:BHP) is an Australian mining company that extracts and sells copper, silver, zinc, molybdenum, uranium, gold, iron ore, and metallurgical and energy coal. The company has operations in Australia, Europe, China, Japan, India, South Korea, North America, and South America.
As per the regulatory filings for the fourth quarter of 2021, Ken Fisher’s fund owns 7.8 million BHP Group Limited shares, worth close to $471 million, representing 0.26% of the total holdings. Another prominent shareholder of the company is Arrowstreet Capital, with a $384 million stake at the end of December 2021. Overall, 21 hedge funds were bullish on the stock.
On February 23, BHP Group Limited declared a $3.00 per share semi-annual dividend, a 25% decrease from its prior dividend of $4.00. The dividend will be distributed on March 28, to shareholders of record on February 25.
HSBC analyst Shilan Modi initiated coverage of BHP Group Limited on March 18 with a Hold rating. The diversified miners have displayed operational improvements over the past five years, which means the sector will experience potential growth or cash returns, the analyst told investors in a research note.
Here is what Harding Loevner has to say about BHP Group in its Q1 2021 investor letter:
“Our purchase of Australian mining company BHP is an example of a quality company at a moderate valuation that should deliver attractive long-term returns. We believe the market has undervalued its enduring competitive advantage due to its low cost iron and copper mining operations which has allowed the company to deliver consistent profits and cash flows across the inevitable ups and downs of the global metals cycle. While the variability of commodity prices prevents BHP from scoring in the top ranks of measured quality, we are willing to bear some of that uncertainty in return for a more attractive valuation given the company’s strong business fundamentals.”
7. Rio Tinto Group (NYSE:RIO)
Number of Hedge Fund Holders: 22
Rio Tinto Group (NYSE:RIO) is a London-based mineral resources company that mines and markets aluminum, copper, diamonds, gold, borates, titanium dioxide, salt, iron ore, and uranium. In Q4 2021, Ken Fisher increased its Rio Tinto Group stake by 2% to 13.5 million shares worth more than $907 million. The stock accounts for 0.50% of the total 13F securities for the fourth quarter.
HSBC analyst Shilan Modi on March 18 initiated coverage of Rio Tinto Group with a Hold rating, stating that quality is already priced into Rio Tinto Group shares. Overall, the analyst believes the mining and metals sector is positioned for potential growth or cash returns, given the operational improvements over the past five years.
On March 15, Rio Tinto Group slid 2.5% a day after disclosing plans to purchase the remaining 49% of Turquoise Hill Resources Ltd. (NYSE:TRQ), the holding company which controls the Oyu Tolgoi copper-gold mine in Mongolia, for approximately $2.7 billion. Shareholders of Turquoise Hill are aiming for a higher acquisition offer from Rio Tinto Group than the C$34 per share put forward by the company. The asking price could top C$50 per share, although Rio Tinto Group has not disclosed how much it is willing to pay. This makes the deal quite uncertain and open to scrutiny presently.
A total of 22 hedge funds were bullish on Rio Tinto Group at the end of December 2021, up from 20 funds in the previous quarter. Renaissance Technologies owned a prominent stake in the company at the end of Q4, worth $88.5 million.
6. Vale S.A. (NYSE:VALE)
Number of Hedge Fund Holders: 25
Vale S.A. (NYSE:VALE) was founded in 1942 and is headquartered in Rio de Janeiro, Brazil, primarily selling iron ore and iron ore pellets to the steelmaking industry in Brazil and internationally. The company also extracts nickel and its by-products, including gold, silver, cobalt, and copper.
Ken Fisher’s fourth quarter filings reveal that his fund owns approximately 31 million shares of Vale S.A., worth $434.3 million, representing 0.24% of the total 13F portfolio.
On March 7, Vale S.A. climbed 2.2% despite a slow day for stocks, including global mining peers. Due to soaring nickel prices amid the Russian crisis, Vale S.A. benefited as it is one of the biggest producers of nickel, which accounted for 6% of its 2021 revenues.
Deutsche Bank analyst Liam Fitzpatrick raised the price target on Vale S.A. to $20 from $19 and kept a Buy rating on the shares on March 10. He told investors that his raised price target was due to the “unprecedented supply shock” in the commodities market from the Russia-Ukraine conflict, and Vale S.A. being a clear winner in its category.
The database of elite funds maintained by Insider Monkey in Q4 2021 reported that 22 hedge funds were bullish on Vale S.A., compared to 27 funds in the previous quarter. Orbis Investment Management is a prominent shareholder of the company, with more than 15 million shares worth $212.8 million.
Vale S.A. is gaining the attention of institutional investors, just like Amazon.com, Inc., PayPal Holdings, Inc., and NVIDIA Corporation.
Here is what Miller Value Partners has to say about Vale S.A. in its Q3 2021 investor letter:
“Vale (VALE) was the top detractor over the quarter, falling 32.6% in sympathy with iron ore’s 48% decline from record highs on China capacity curbs and growing fears of financial issues within the property sector. Vale reported Q2 EBITDA of $11.24Bn, slightly below consensus of $11.47Bn on higher than expected iron ore cash costs. Free cash flow of $6.5Bn (35% annualized yield) came in well ahead of expectations, driving $2.6Bn of stock buybacks and a 1H21 dividend of $7.6Bn, implying year-to-date (YTD) shareholder returns of roughly $13.8Bn (19% of the current market cap). Management maintained FY21 production guidance for iron ore of 315-335 Metric tons (Mt) and lowered year-end 2022 exit capacity to 370Mt (from 400Mt) due to Northern System licensing delays. Additionally, the company hosted their annual Investor Day, outlining new production initiatives aimed at becoming a key supplier to steelmakers in light of decarbonization goals.”
5. Nucor Corporation (NYSE:NUE)
Number of Hedge Fund Holders: 26
Nucor Corporation (NYSE:NUE) is a North Carolina-based provider of steel and steel products. In addition to its primary steel business, the company’s Raw Materials segment produces ferrous and nonferrous metals such as pig iron.
The securities filings for Q4 2021 reveal that Ken Fisher owned 255,774 shares of Nucor Corporation, valued at $29.1 million. The billionaire increased his stake by 3% in Q4.
Goldman Sachs analyst Emily Chieng raised the price target on Nucor Corporation on February 15 to $120 from $114 and kept a Neutral rating on the shares as part of a broader research note on metals & mining. The analyst updated her model based on refreshed commodity price assumptions.
On February 22, Nucor Corporation declared a quarterly dividend of $0.50 per share, in line with previous. The dividend is payable on May 11, to shareholders of record on March 31.
The Q4 database of Insider Monkey suggests that 26 hedge funds were long Nucor Corporation, up from 25 funds in the earlier quarter. AQR Capital Management is a leading shareholder of the company, with a position worth $53 million.
Here is what Madison Funds has to say about Nucor Corporation in their Q1 2021 investor letter:
“This quarter we are highlighting Nucor (NUE) as a relative yield example within the Materials sector. NUE is a leading manufacturer of steel and steel products. It is the largest steelmaker in the U.S. based on production volume with a vertically integrated business model. The company has a low fixed-cost position due to its use of electric arc furnaces, which are cleaner, less labor and energy-intensive than blast furnaces, and this results in low total costs per unit of steel produced. Our view is that a low cost position is an important attribute in a commodity business. NUE’s historical financial record supports this view as it has been profitable every year except for one over the past fifty years, unlike many steel producing peers. In addition, the company has a diverse product and mill portfolio that takes market share over time. We believe its scale, low fixed-cost position, consistent record of profitability and diverse mill portfolio result in a sustainable competitive advantage versus peers.
Our thesis on NUE is that it should benefit from higher steel prices as the U.S. economy recovers from the downturn caused by the Covid-19 pandemic. The company may also be a beneficiary of on-shoring, where manufacturing returns to the United States. These two dynamics should drive growth this year, and if the United States Congress passes new infrastructure legislation, that will provide another avenue for growth longer-term. (Click here to read full text)
4. Steel Dynamics, Inc. (NASDAQ:STLD)
Number of Hedge Fund Holders: 29
Headquartered in Fort Wayne, Indiana, Steel Dynamics, Inc. (NASDAQ:STLD) operates as a steel producer and metal recycler in the United States. The Metals Recycling Operations segment processes metals into reusable forms and grades, and offers nonferrous products including aluminum, brass, copper, and stainless steel.
In the fourth quarter of 2021, Ken Fisher elevated his stake in Steel Dynamics, Inc. by 189%. Securities filings for Q4 reveal that his fund owned 188,534 shares of the company, worth $11.70 million.
Emily Chieng from Goldman Sachs kept a Buy rating on Steel Dynamics, Inc. and lifted the price target to $80 from $75 as part of a broader research note. The analyst upgraded her model to account for commodity price and cost assumptions amid the macro backdrop.
Among the hedge funds tracked by Insider Monkey, 29 hedge funds were long Steel Dynamics, Inc., up from 23 funds in the prior quarter. D E Shaw is the leading shareholder of the company, with 1.2 million shares worth $75.5 million.
3. Cleveland-Cliffs Inc. (NYSE:CLF)
Number of Hedge Fund Holders: 36
Cleveland-Cliffs Inc. (NYSE:CLF) is headquartered in Cleveland, Ohio, operating as a flat-rolled steel producer in North America. The company also provides hot-briquetted iron products. On March 21, Cleveland-Cliffs Inc. announced that it will redeem its remaining $607 million of outstanding 9.875% senior secured notes due October 2025 on April 20, 2022.
According to the securities filings for Q4 2021, Ken Fisher’s fund owns 12.5 million Cleveland-Cliffs Inc. shares, worth $272.2 million, representing 0.15% of the total 13F portfolio.
On March 15, Citi analyst Alexander Hacking raised the price target on Cleveland-Cliffs Inc. to $28 from $25 and kept a Neutral rating on the shares. According to the analyst, the U.S. is in the “middle of massive steel inflation” spreading out of Europe and potential deflation originating from China. He also raised his 2022 U.S. price deck for steel.
A total of 36 hedge funds were bullish on Cleveland-Cliffs Inc., compared to 35 funds in the earlier quarter. Ken Griffin’s Citadel Investment Group is the largest shareholder of the company, with 7.5 million shares worth $163.5 million.
2. Alcoa Corporation (NYSE:AA)
Number of Hedge Fund Holders: 41
Alcoa Corporation (NYSE:AA) is a Pennsylvania-based company that produces and sells bauxite, alumina, and aluminum products in the United States, Spain, Australia, Iceland, Norway, Brazil, and Canada. Ken Fisher’s fund owns 6.3 million Alcoa Corporation shares, worth $378.5 million, representing 0.21% of the total 13F securities.
Argus analyst David Coleman raised the price target on Alcoa Corporation to $95 from $68 and kept a Buy rating on the shares on March 21. The analyst noted that Alcoa Corporation has a strong track record in its industry given its improving balance sheet, soaring aluminum prices, and the latest developments in the Chinese and Russian markets. He also told investors that Alcoa Corporation recently initiated a dividend and a $500 million share buyback program. He elevated his FY22 EPS view by $2.00 to $9.30 and his FY23 estimate by 95c to $8.
On February 24, Alcoa Corporation declared a quarterly dividend of $0.10 per share. The dividend is payable on March 24, to shareholders of record on March 8.
According to the fourth quarter database of Insider Monkey, 41 hedge funds were bullish on Alcoa Corporation, compared to 44 funds in the last quarter. Theleme Partners is a significant shareholder of Alcoa Corporation, with 4.90 million shares worth $292.4 million.
1. Freeport-McMoRan Inc. (NYSE:FCX)
Number of Hedge Fund Holders: 66
Freeport-McMoRan Inc. (NYSE:FCX) is an Arizona-based company that mines mineral properties in North America, South America, and Indonesia, exploring primarily for copper, gold, molybdenum, silver, and other metals. The stock gained 17.37% over the last month, as demand for precious metals rose amid the Ukraine crisis.
On March 17, Stifel analyst Alex Terentiew raised the price target on Freeport-McMoRan Inc. to $54 from $49 and kept a Buy rating on the shares.
Ken Fisher increased his stake in Freeport-McMoRan Inc. by 4% in the fourth quarter of 2021, holding almost 49 million shares worth more than $2 billion. The stock accounts for 1.14% of the fund’s total 13F securities.
At the end of the fourth quarter of 2021, 66 hedge funds reported owning stakes in Freeport-McMoRan Inc., collectively worth $3.7 billion. Ric Dillon’s Diamond Hill Capital is a prominent shareholder of the company, with 13.8 million shares worth close to $577 million.
You can also take a look at 10 Dividend Stocks With Over 5% Yield and 10 Semiconductor Stocks to Buy Under $50.
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This article is originally published at Insider Monkey.
