In this article, we discuss the 5 best mineral stocks to buy now. If you want to read our detailed analysis of these stocks, go directly to the 10 Best Mineral Stocks To Buy Now.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. Lithium prices have more than doubled over the past year, so we are checking out this emerging lithium stock. We go through lists like the 10 best growth stocks to buy to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now, let’s take a look at the 5 best mineral stocks to buy according to hedge funds.
5. BHP Group (NYSE:BHP)
Number of Hedge Fund Holders: 24
BHP Group (NYSE:BHP) is an Australian natural resources firm. It engages in the petroleum, copper, iron ore, and coal business. On November 7, merely weeks after the board of the firm approved a climate change plan that envisions net zero emissions by 2050 for suppliers and shippers, the company revealed that it had agreed to sell 80% of its stake in two Australian coal mines in a deal worth $1.35 billion.
The move will help the BHP Group (NYSE:BHP) significantly reduce the carbon footprint of the company. Deutsche Bank analyst Liam Fitzpatrick recently termed the stock a Catalyst Buy Call as energy stocks extended a strong rally.
Among 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 8 million shares worth more than $594 million.
In its Q1 2021 investor letter, Harding Loevner, an asset management firm, highlighted a few stocks and BHP Group (NYSE:BHP) was one of them. Here is what the fund said:
“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.”
4. Vale S.A. (NYSE:VALE)
Number of Hedge Fund Holders: 27
Vale S.A. (NYSE:VALE) is a Brazilian mining firm primarily engaged in the iron business. The company recently sold a sizable stake in Mosaic, a crop nutrients firm that more than doubled in value over the past few months amid an increase in fertilizer prices, for $1.26 billion. The company said that the sale reflected a strategic choice to focus capital allocation towards the core business.
After posting healthy gains in the past few months, Vale S.A. (NYSE:VALE) has dipped in recent weeks after China moved to crackdown on the minerals and energy industry in the country. However, the firm still posted a 17% year-on-year gain in revenue for the third quarter.
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 43 million shares worth more than $998 million.
3. Albemarle Corporation (NYSE:ALB)
Number of Hedge Fund Holders: 28
Albemarle Corporation (NYSE:ALB) develops and markets specialty chemicals that include lithium compounds, an important commodity in the world economy as EV adoption accelerates. The company recently posted earnings for the third quarter, reporting earnings per share of $1.05, beating market predictions by $0.28. The revenue over the period was $830 million, smashing estimates by $66 million.
Analysts are also bullish on Albemarle Corporation (NYSE:ALB) stock, with Bank of America, Mizuho, and Oppenheimer all raising the targets on the shares recently. The company has also boosted guidance for the fiscal year as lithium demand skyrockets.
At the end of the second quarter of 2021, 28 hedge funds in the database of Insider Monkey held stakes worth $165 million in Albemarle Corporation (NYSE:ALB), down from 31 the preceding quarter worth $262 million.
2. Teck Resources Limited (NYSE:TECK)
Number of Hedge Fund Holders: 40
Teck Resources Limited (NYSE:TECK) is a diversified metals and mining firm. The rise in coal prices over the past few weeks, in part due to increased demand that outstrips production, has benefited the stock. The company recently posted record-shattering earnings results, beating estimates on earnings per share by C$0.39 and on revenue by $330 million. It has also recently signed a $4 billion revolving credit facility linked to sustainability that will mature in 2026.
On October 28, investment advisory BMO Capital maintained an Outperform rating on Teck Resources Limited (NYSE:TECK) stock and raised the price target to C$54 from C$50. Jackie Przybyłowski, an analyst at the advisory, issued the ratings update.
Among the hedge funds being tracked by Insider Monkey, United Kingdom-based investment firm Contrarius Investment Management is a leading shareholder in Teck Resources Limited (NYSE:TECK) with 7.3 million shares worth more than $170 million.
1. Newmont Corporation (NYSE:NEM)
Number of Hedge Fund Holders: 55
Newmont Corporation (NYSE:NEM) is a Colorado-based mining firm that has interests in gold, copper, silver, zinc, and lead. It operates in several countries around the world, including the United States, Canada, Mexico, Peru, Argentina, Australia, and Ghana, among others. The firm had proven gold reserves of 94 million ounces at the end of 2020. As gold prices climb above $1800/oz for the first time in two months, the stock has soared.
Newmont Corporation (NYSE:NEM) has solid fundamentals and an impressive dividend history. In late October, the firm declared a quarterly dividend of $0.55 per share, in line with previous. The forward yield was 3.8%.
At the end of the second quarter of 2021, 55 hedge funds in the database of Insider Monkey held stakes worth $1.2 billion in Newmont Corporation (NYSE:NEM), up from 43 in the preceding quarter worth $994 million.
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.”
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