In this article, we discuss the 10 best copper stocks to buy.
The copper mining industry is experiencing significant market trends that have far-reaching implications for the global landscape. These trends are crucial for understanding the current dynamics and future prospects of the industry. The demand for copper has been steadily rising, driven by various factors. Rapid urbanization and industrialization in emerging economies, such as China and India, have fueled the need for copper in infrastructure development, construction projects, and electrical wiring. Additionally, the growing adoption of electric vehicles (EVs), renewable energy systems, and advancements in technology, including 5G networks, are driving the demand for copper as a vital component in these applications.
However, the copper mining industry is facing supply constraints due to several factors. Aging mines, declining ore grades, and operational challenges in existing mining operations have led to a slowdown in production growth. Furthermore, geopolitical factors, including trade tensions, labor strikes, and regulatory changes, can disrupt the supply chain and affect the availability of copper in the market. In addition, environmental sustainability has become a significant focus in the mining industry, including copper mining. Companies are under increasing pressure to adopt sustainable practices, reduce greenhouse gas emissions, and minimize water usage.
The copper mining industry is also embracing technological advancements to improve efficiency, productivity, and sustainability. Automation, artificial intelligence, and data analytics are being utilized to optimize mining operations, reduce costs, and enhance safety. Furthermore, innovations in mineral exploration techniques are helping identify new copper deposits and improve the efficiency of resource estimation. The emphasis on responsible sourcing and ethical supply chains is gaining momentum in the copper mining industry. Companies are increasingly expected to adhere to strict social and environmental standards, ensuring the ethical extraction and processing of copper.
Consumers and investors are demanding transparency and accountability throughout the supply chain, prompting mining companies to adopt responsible sourcing practices and certifications. Understanding these market trends is vital for stakeholders in the copper mining industry. Mining companies need to anticipate and adapt to changing market dynamics to ensure long-term sustainability and profitability. Governments and regulatory bodies play a crucial role in setting policies that balance environmental concerns with the industry’s economic significance.
The global market for copper is projected to experience significant growth, with an expected increase from $160.7 billion in 2022 to $176.74 billion in 2023, at a compound annual growth rate (CAGR) of 10.0%. However, the recent Russia-Ukraine war has had disruptive effects on the global economy, particularly in the short term. This conflict has led to economic sanctions, commodity price surges, and supply chain disruptions, resulting in inflation and impacting various markets worldwide. Nonetheless, the copper market is anticipated to continue expanding, reaching $254.33 billion by 2027, with a CAGR of 9.5%.
Within the copper industry, ore mining is a lucrative business. It involves a complex process that begins with extracting ore containing less than 1% copper and concludes with the production of cathodes. These cathodes are sheets of copper that are 99.99% pure and are eventually transformed into everyday items. Copper oxide and copper sulfide are the two main types of ores found in the mining process. The copper ore mining market encompasses several countries, including Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, the UK, and the USA. These countries are involved in the extraction and production of copper ore.
In 2022, the Asia-Pacific region emerged as the largest market for copper ore mining. The copper ore mining industry encompasses different types, such as the refining industry, metal processing industry, chemical industry, and other related sectors. The refining industry involves the production and delivery of oil and oil products. The global copper market is expected to witness substantial growth despite the short-term disruptions caused by the Russia-Ukraine war. The market is driven by the demand for copper in various industries, including construction, transportation, and electronics.
While the ongoing conflict poses challenges, the overall outlook for the copper market remains positive, with the industry continuing to evolve and meet the demand for this versatile metal. 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).
Our Methodology
For this article, we selected mining stocks that have interests in the copper business based on overall hedge fund sentiment. We have assessed the hedge fund sentiment from Insider Monkey’s database of 943 elite hedge funds tracked as of the end of the first quarter of 2023. The list is arranged in ascending order of the number of hedge fund holders in each firm.
Copyright: tomas1111 / 123RF Stock Photo
Best Copper Stocks to Buy
10. Ero Copper Corp. (NYSE:ERO)
Number of Hedge Fund Holders: 9
Ero Copper Corp. (NYSE:ERO) is a Canadian company that engages in the exploration, development, and production of mining projects in Brazil. It has a wide range of interests in the copper business. In early April, the company announced that it anticipated consolidated copper production rising by 125% from 2022 levels to 100K-110K metric tons in 2025. The new outlook, which is a 15% increase over the previous 2025 production forecast of 92K-102K tons, was due primarily to higher anticipated mined grades in 2024-26 based on recent infill drilling.
On May 10, investment advisory Canaccord maintained a Buy rating on Ero Copper Corp. (NYSE:ERO) stock and lowered the price target to C$31.50 from C$32. Analyst Dalton Baretto issued the target update.
At the end of the first quarter of 2023, 9 hedge funds in the database of Insider Monkey held stakes worth $223 million in Ero Copper Corp. (NYSE:ERO), compared to 8 in the previous quarter worth $159 million.
Just like Freeport-McMoRan Inc. (NYSE:FCX), Rio Tinto Group (NYSE:RIO), and Newmont Corporation (NYSE: NEM), Ero Copper Corp. (NYSE:ERO) is one of the most attractive copper stocks to buy.
9. Southern Copper Corporation (NYSE:SCCO)
Number of Hedge Fund Holders: 19
Southern Copper Corporation (NYSE:SCCO) is a Mexico-based mining company that focuses on the production of copper. In late April, the company announced that Q1 copper production gained 4% year-on-year to 223,573 tons. The copper company attributed the increase to a 48.5% boost in output at the Cuajone mine in Peru due to higher ore grades and a return to full operating capacity. The firm also said that gold production was on track to grow by 40% from 2022 levels to 55K-60K oz/year beginning in 2024.
On April 21, investment advisory Barclayes maintained an Equal Weight rating on Southern Copper Corporation (NYSE:SCCO) stock and raised the price target to $64 from $53, maintaining a preference for gold over other base equities in the macro environment.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Southern Copper Corporation (NYSE:SCCO) with 723,894 shares worth more than $55 million.
8. BHP Group (NYSE:BHP)
Number of Hedge Fund Holders: 24
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. On May 30, the firm announced that it had partnered with Microsoft to leverage artificial intelligence (AI) technology to enhance the recovery process at a large copper mine. By utilizing AI and machine learning algorithms, BHP aims to optimize the copper extraction and processing operations, thereby increasing productivity and efficiency. The collaboration with Microsoft will involve utilizing their Azure cloud computing platform to analyze vast amounts of geological and operational data in real-time.
On May 3, investment advisory Goldman Sachs upgraded BHP Group (NYSE:BHP) stock to Buy from Neutral with a price target of A$49.90, noting that the stock was attractively valued given the price drop since January.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in BHP Group (NYSE:BHP) with 863,916 shares worth more than $54 million.
In its Q1 2021 investor letter, Harding Loevner, an asset management firm, highlighted a few stocks and BHP Group Ltd. (NYSE:BHP) was one of them. Here is what the fund said:
“Our purchase of Australian mining company BHP Group Ltd. (NYSE: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. Hudbay Minerals Inc. (NYSE:HBM)
Number of Hedge Fund Holders: 25
Hudbay Minerals Inc. (NYSE:HBM) 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. In mid-April, the firm announced that it was purchasing Copper Mountain Mining in a deal worth $439 million. The acquisition is expected to strengthen the position of the former in the copper mining sector and expand a portfolio of copper assets. The deal includes the acquisition of the Copper Mountain mine in British Columbia, Canada. The move is part of a wider strategy by Hudbay to enhance copper production and leverage the increasing demand for copper in various industries, including clean energy.
On May 18, Stifel analyst Alex Terentiew resumed coverage of Hudbay Minerals Inc. (NYSE:HBM) stock with a Buy rating and a price target of C$10.70, predicting upside driven by higher copper and gold grades at Constancia over the next three years.
Among 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 30 million shares worth more than $161 million.
6. Vale S.A. (NYSE:VALE)
Number of Hedge Fund Holders: 29
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.The firm has been actively searching for copper deposits in Peru to meet the increasing demand for this metal in the global transition towards clean energy. Despite abandoning one project in a copper-rich area in southern Peru, Vale has two other early-stage exploration projects underway. These greenfield projects require a total investment of $7 million, per reports.
On April 28, Morgan Stanley analyst Carlos De Alba maintained an Overweight rating on Vale S.A. (NYSE:VALE) stock and lowered the price target to $18 from $19, updating 2023-26 estimates to account for Q1 results and marking-to-market the forex and commodity price assumptions.
Among the hedge funds being tracked by Insider Monkey, Florida-based investment firm GQG Partners is a leading shareholder in Vale S.A. (NYSE:VALE) with 22 million shares worth more than $351 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 elite copper stocks to buy.
5. Rio Tinto Group (NYSE:RIO)
Number of Hedge Fund Holders: 33
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. In March, the firm announced that it had commenced copper extraction from the underground section of a massive mine in Mongolia. The project had faced years of delays, cost overruns, and disputes with the Mongolian government.
On May 26, Morgan Stanley analyst Alain Gabriel upgraded Rio Tinto Group (NYSE:RIO) stock to Overweight from Equal Weight with a price target of 5,800 GBP. noting that demand concerns and falling iron ore prices have derated Rio shares, presenting an opportunity to gain exposure to a business with high-quality assets, a growing copper footprint, improving operating performance and best-in-class capital return prospects.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Encompass Capital Advisors is a leading shareholder in Rio Tinto Group (NYSE:RIO) with 1.9 million shares worth more than $132 million.
4. Barrick Gold Corporation (NYSE:GOLD)
Number of Hedge Fund Holders: 41
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. Recent reports indicate that the company has decided not to pursue the acquisition of copper assets of Teck, another mining firm, signaling a disinterest in expanding a portfolio in the copper mining sector. The decision comes amidst a recent announcement from the firm that it would focus on strengthening gold and copper operations in jurisdictions where it already has a strong presence.
On April 21, investment advisory Barclays maintained an Overweight rating on Barrick Gold Corporation (NYSE:GOLD) stock and raised the price target to $28 from $26, noting the improved outlook in medium-term copper and gold prices.
At the end of the first quarter of 2023, 41 hedge funds in the database of Insider Monkey held stakes worth $763 million in Barrick Gold Corporation (NYSE:GOLD), compared to 43 the preceding quarter worth $721 million.
In its Q4 2022 investor letter, Old West 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 Gold Corporation (NYSE:GOLD) is the second largest gold miner in the world, with operations in the U.S., Canada, Africa, South America and more. Barrick is also a major copper producer. Former Goldman Sachs executive John Thornton took control of the company in 2012 and quickly realized he wanted someone with a mining background to run the company. Mark Bristow, at that time CEO of Randgold, was considered one of the best gold mining executives in the world. Thornton wanted Bristow so badly Barrick bought Randgold in 2018. Bristow who is South African, had extensive experience operating mines throughout Africa, and in fact would fly his own single engine plane to visit mines. He has his PhD in Geology, and he has flourished running Barrick the past five years.
Barrick is estimated to have $1.6 billion of net income this year on $11.5 billion of revenue. Net Income has been growing 15% per year. The stock trades at $19.00 per share which is 16 times forward earnings, and the stock has a 3.15% dividend yield. Barrick has a fortress balance sheet with $5.7 billion in cash and $5 billion of long term debt, which is only one time EBITDA.”
3. Newmont Corporation (NYSE:NEM)
Number of Hedge Fund Holders: 52
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. Recent reports indicate that the company has increased an offer to acquire Newcrest Mining, an Australian gold producer, to $19.5 billion. This revised offer comes as Newmont aims to strengthen in the global gold market and expand a portfolio of mining assets.
On May 2, investment advisory National Bank maintained an Outperform rating on Newmont Corporation (NYSE:NEM) stock and raised the price target to C$94 from C$91. Analyst Mike Parkin issued the pricing update.
At the end of the first quarter of 2023, 52 hedge funds in the database of Insider Monkey held stakes worth $628 million in Newmont Corporation (NYSE:NEM), compared to 50 in the preceding quarter worth $991 million.
In its Q2 2022 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:
“Shares of Colorado-based Newmont Corporation (NYSE:NEM), the largest gold miner in the world, experienced weakness in the quarter as falling gold bullion prices and cost inflation hurt miners in general. More idiosyncratically, the company reported slightly disappointing earnings and production results for its most recent quarter due to pandemic-related disruptions, ongoing supply-chain constraints, and labor shortages.
It also warned that operating costs for 2022 were likely to come in at the upper end of previous guidance. We remain constructive on the stock, which offers steady production anchored in good jurisdictions, a good pipeline of organic projects, a strong balance sheet, and proven management.”
2. Teck Resources Limited (NYSE:TECK)
Number of Hedge Fund Holders: 66
Teck Resources Limited (NYSE:TECK) is a natural resources firm that engages in the mining of copper, zinc, and other metals. 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. In late March, the firm announced the successful achievement of first copper production at the QB2 project in northern Chile. This milestone marks an important step in the development of the project, which is a joint venture with Sumitomo Metal Mining and has a significant copper resource base. The QB2 project is expected to have a long mine life and contribute to the copper production portfolio of the firm.
On May 3, Deutsche Bank analyst Abhi Agarwal maintained a Buy rating on Teck Resources Limited (NYSE:TECK) stock and raised the price target to $47 from $46, noting that recovering demand in China and generally tight fundamentals should cushion the downside risks for metals and mining stocks.
Among the hedge funds being tracked by Insider Monkey, Florida-based investment firm Soroban Capital Partners is a leading shareholder in Teck Resources Limited (NYSE:TECK) with 11 million shares worth more than $404 million.
1. Freeport-McMoRan Inc. (NYSE:FCX)
Number of Hedge Fund Holders: 77
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, Safford, Sierrita and Miami, Chino and Tyrone. In late April, the firm revised copper sales guidance for 2023 downward while upgrading the gold production outlook. The company has reduced the copper sales estimate due to operational challenges at the Grasberg mine in Indonesia, resulting in lower production volumes.
On April 23, Raymond James analyst Brian MacArthur maintained an Outperform rating on Freeport-McMoRan Inc. (NYSE:FCX) stock and lowered the price target to $47 from $48, noting the shares offer investors exposure to a portfolio of large, low-cost, long life copper assets with significant gold production.
At the end of the first quarter of 2023, 77 hedge funds in the database of Insider Monkey held stakes worth $1.6 billion in Freeport-McMoRan Inc. (NYSE:FCX), compared to 68 in the preceding quarter worth $4.7 billion.
You can also take a peek at 10 Best Stocks in Each Sector and 10 Best Regional Bank Stocks To Invest In.
Suggested Articles:
- Jim Cramer Stock Portfolio
- Top Dividend Stocks To Invest In
- 15 Best Cloud Computing Stocks To Invest In
Disclose. None. 10 Best Copper Stocks to Buy is originally published on Insider Monkey.
