In this article, we discuss 5 best copper stocks to invest in. If you want to read our discussion on the copper industry, head directly to 11 Best Copper Stocks To Invest In According To Analysts.
5. Vale S.A. (NYSE:VALE)
Number of Hedge Fund Holders: 34
Average Upside Potential: 35.04%
Vale S.A. (NYSE:VALE) is one of the major producers and sellers of iron ore and iron ore pellets for steelmaking purposes in Brazil and internationally. The company operates in two segments – Iron Solutions, which involves the production of iron ore, pellets, manganese, and other ferrous products; and Energy Transition Materials, which focuses on nickel extraction for stainless steel, electric vehicles, and metal alloys, along with by-products like gold, silver, cobalt, precious metals, platinum, and copper used in the construction sector. It is one of the top copper stocks to watch.
On February 23, Vale S.A. (NYSE:VALE) reported Q4 adjusted EBITDA of $6.7 billion, a 35% year-over-year and 50% quarter-over-quarter growth attributed to improved operational performance and robust iron ore prices. The board also approved a shareholder payout of approximately $0.55 per share.
According to Insider Monkey’s fourth quarter database, 34 hedge funds were bullish on Vale S.A. (NYSE:VALE), same as the prior quarter. Ken Fisher’s Fisher Asset Management is the largest stakeholder of the company, with 18.16 million shares worth $288 million.
Miller Value Partners Income Strategy made the following comment about Vale S.A. (NYSE:VALE) in its second quarter 2023 investor letter:
“Vale S.A. (NYSE:VALE) fell during the quarter with iron ore prices. The company reported 1Q23 revenue of $8.44B, -22.7% Y/Y, below consensus of $8.79B, and Adjusted EBITDA of $3.69B, compared to 1Q22 EBITDA of $6.55B, below consensus of $4.49B. The Brazilian miner produced 66.8 million tons (Mt) of iron ore in 1Q23, +5.8% Y/Y, below consensus of 67.7 Mt, 67.0 thousand tons (kt) of copper, +18.4% Y/Y, and 41.0 kt of nickel, -10.5% Y/Y. Although management reaffirmed its FY23 production guidance, analysts seemed to be concerned by the negatively offsetting impacts of weaker iron ore prices as China, the world’s largest iron ore buyer, has threatened to curb any “unreasonable” price gains for the metal in an effort to prevent this year’s steel output from exceeding 2022 levels. Vale generated 1Q23 free cash flow (FCF) of $2.28B, bringing trailing-twelve month (TTM) FCF to $6.73B, or a FCF yield of 11.3%. The company repurchased $763MM worth of shares in the quarter and paid $1.80B in dividends, bringing total capital returned to shareholders in the quarter to $2.56B, or 4.3% of the company’s market cap.”
