In this article, we will look at the top 10 zinc stocks picked by hedge funds for 2022.
Zinc has a variety of uses that range from its ability to galvanize other metals in industrial applications, to being a key component in pharmaceutical products, electrical equipment, textiles, and even consumer staples. Zinc prices are soaring in 2022, which is also causing prices of other goods to surge. The Russian invasion of Ukraine has resulted in commodity prices surging, skyrocketing inflation, and an extremely volatile market for commodities.
Zinc Prices Rose In 2021
However, zinc has been on an upwards trend since well before the Ukraine conflict, with Knoema putting forth data that details price drivers for the metal. According to Knoema, zinc prices grew 50% year-over-year in May 2021, with the metal trading at $2,965 per metric ton at the time compared to $1,975 in May 2020. Knoema cited the primary price drivers for soaring zinc prices in 2021 to be a disruption of zinc supplies due to operations being halted at large zinc mines during the COVID-19 pandemic, environmental restrictions in China, along with mine closures in other countries. China is the world’s largest zinc producer, having produced an estimated 4.2 million metric tons in 2021.
Zinc Prices Soar
Last October, The World Bank published its commodity forecast report in which it estimated that zinc prices will fall to an average spot price of $2,400 per metric ton in 2022, down from $2,700 at the end of 2021, hitting an inflection point and then rising steadily. Of course, this was before the major supply chain shock that would be triggered by Russia’s declaration of war on Ukraine. Nickel prices soared enough to cause the London Metal Exchange to halt trading, and zinc and lead prices shot up to decade-long record highs. This March, zinc prices spiked, attaining a record high of $4,896 per ton, while lead rose to a 10-year high of $2,700 per ton.
With the current geopolitical situation driving commodities prices, and zinc prices sitting well-above forecasted levels, zinc stocks are being eyed by elite hedge funds and retail investors who are trying to maximize their returns amidst supply chain woes and a dreary geopolitical situation. We have compiled the top 10 zinc stocks picked by hedge funds for 2022 which include Teck Resources Ltd (NYSE:TECK), Vale S.A. (NYSE:VALE), and Wheaton Precious Metals Corp. (NYSE:WPM), among others.
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Our Methodology
To determine the top 10 zinc stocks picked by hedge funds for 2022 we looked for zinc stocks that are gaining momentum and experiencing high-trading volumes. We made use of Insider Monkey’s database, which tracks over 900 elite hedge funds as of the fourth quarter of 2021 to derive the hedge fund sentiment for each stock. We also gave weight to the analyst sentiment around each stock and mentioned it along with the investor sentiment. We have ranked these stocks by the number of hedge fund holders, and have also mentioned the most prominent shareholders.
Now that we have some context, let’s look at the top 10 zinc stocks picked by hedge funds for 2022.
Top 10 Zinc Stocks Picked By Hedge Funds for 2022
10. Orla Mining Ltd. (NYSE:ORLA)
Number of Hedge Fund Holders: 3
Orla Mining Ltd. (NYSE:ORLA) acquires, explores for, and develops mineral properties. The company explores gold, silver, zinc, lead, and copper deposits. Orla Mining Ltd. (NYSE:ORLA) boasts a 100% interest in the mineral-rich Camino Rojo project, and also the Cerro Quema project located in the Azuero Peninsula in Panama.
This April, Scotiabank analyst Ovais Habib raised his price target on Orla Mining Ltd. (NYSE:ORLA) to CAD7 ($5.51) from CAD6.75 ($5.31) and reiterated an ‘Outperform’ rating on the shares. Investors and analysts are equally bullish on Orla Mining Ltd. (NYSE:ORLA), seeing it as an undervalued high-momentum zinc stock with upside potential. As of April 23, Orla Mining Ltd. (NYSE:ORLA) has returned 26.13% over the past six months.
Hedge funds are upping their stakes in Orla Mining Ltd. (NYSE:ORLA). By the end of the fourth quarter of 2021, Orla Mining Ltd. (NYSE:ORLA) was found in three hedge funds’ portfolios. The combined stakes of these hedge funds came to $800,000. In the preceding quarter, three funds held ORLA stakes worth $709,000. The hedge fund sentiment for the stock is positive, making it rank among the top zinc stocks being picked by hedge funds in 2022.
As of December 31, 2021, First Eagle Investment Management was one of the most prominent shareholders in the company, owning over 5.8 million shares of the stock. Vale S.A. (NYSE:VALE), Wheaton Precious Metals Corp. (NYSE:WPM), and Trilogy Metals Inc. (NYSE:TMQ) are some of the other zinc stocks that are being picked by hedge funds in 2022.
9. Trilogy Metals Inc. (NYSE:TMQ)
Number of Hedge Fund Holders: 8
Trilogy Metals Inc. (NYSE:TMQ) operates as a base metals exploration company in the United States. The company is dedicated to the exploration and development of minerals and is working on the Upper Kobuk Mineral Projects in Alaska’s Ambler Mining District, which contains an estimated 3.4 billion pounds of copper, 3.36 billion pounds of zinc, 0.73 million ounces of gold, and 55 million ounces of silver.
Top money managers were initiating long positions in Trilogy Metals Inc. (NYSE:TMQ) heading into 2022, which is why it is ranked among the top zinc stocks being picked by hedge funds in 2022. Insider Monkey found that by the end of the fourth quarter of 2021, eight hedge funds held long positions in Trilogy Metals Inc. (NYSE:TMQ), with their stakes worth $50.9 million. That’s compared to seven funds long TMQ in the preceding quarter with stakes valued at $58 million.
8. Silvercorp Metals Inc. (NYSE:SVM)
Number of Hedge Fund Holders: 9
Silvercorp Metals Inc. (NYSE:SVM) engages in the acquisition, exploration, development, and mining of mineral properties in China and Mexico. The company primarily explores silver, gold, lead, and zinc metals. Its flagship property is the Ying silver-lead-zinc project located in the Ying Mining District in China.
On February 8, Silvercorp Metals Inc. (NYSE:SVM) announced its results for its fiscal third quarter of 2022, reporting EPS of $0.02. The company’s quarterly revenue came to $59.08 million, up 10.85% year-over-year and outperforming the market consensus by $0.61 million. In February, Silvercorp Metals Inc. (NYSE:SVM) announced that for its fiscal year 2023, the company expects to mine and process ores in the range of 1.04 million to 1.14 million tons, yielding 6,300 to 7,900 ounces of gold, 7.0 million to 7.3 million ounces of silver, 68.4 million to 71.3 million pounds of lead, and 32.0 million to 34.5 million pounds of zinc.
Silvercorp Metals Inc. (NYSE:SVM) has positive investor sentiment and is a top zinc stock being picked by hedge funds in 2022. Silvercorp Metals Inc. (NYSE:SVM) was a part of nine hedge funds’ portfolios at the close of Q4 2021. The total stakes of these funds came to $35.94 million, up from $28.18 million in the third quarter of 2021. Renaissance Technologies upped its Q3 stake in Silvercorp Metals Inc. (NYSE:SVM) by 4%, with the value of its holding rising to $17.79 million by the close of Q4.
7. Eldorado Gold Corporation (NYSE:EGO)
Number of Hedge Fund Holders: 16
Eldorado Gold Corporation (NYSE:EGO) engages in the mining, exploration, and development of mineral products primarily in Turkey, Canada, Greece, and Romania. The company produces gold, silver, lead, and zinc. Eldorado Gold Corporation (NYSE:EGO) owns 100% interest in the Kisladag and Efemcukuru gold mines located in western Turkey, as well as the Lamaque gold mines located in Canada, and the Olympias, Stratoni, Skouries, Perama Hill, and Sapes gold mines located in Greece. Moreover, it owns an 80.5% interest in the Certej development projects located in Romania.
On February 24, Eldorado Gold Corporation (NYSE:EGO) reported its financial results for the fiscal fourth quarter of 2021, in which it beat EPS estimates by $0.02 and revenue estimates by $6.78 million. The company registered EPS of $0.14 and generated revenue of $244.60 million during the quarter. Moreover, National Bank analyst Mike Parkin raised his price target on Eldorado Gold Corporation (NYSE:EGO) to CAD20 ($15.73) from CAD18 ($14.16) earlier this month, while maintaining an ‘Outperform’ rating on the shares, which have gained 12.60% over the past six months.
Eldorado Gold Corporation (NYSE:EGO) is rising in popularity among hedge funds, being spotted in 16 hedge funds’ portfolios at the close of 2021. The total stakes of these hedge funds exceeded $125 million, up from $94.3 million in the third quarter of 2021. As of December 31, Renaissance Technologies is a leading shareholder in Eldorado Gold Corporation (NYSE:EGO) with a stake worth more than $45.78 million.
6. Valmont Industries, Inc. (NYSE:VMI)
Number of Hedge Fund Holders: 17
Valmont Industries, Inc. (NYSE:VMI) produces and sells fabricated metal products in the United States, Australia, Brazil, Denmark, and other international markets. The stock is exhibiting good momentum, having appreciated by 13.46% over the past six months and ranks among the top zinc stocks being picked by hedge funds in 2022.
This month, the company announced market-beating results for its fiscal first quarter of 2022. The company reported earnings per share of $3.07, beating analyst estimates by $0.63, while its quarterly revenue of $980.82 million, up 26.58% year-over-year, outperformed the market consensus by $92.75 million. Shortly after, DA Davidson analyst Brent Thielman raised his price target on Valmont Industries, Inc. (NYSE:VMI) to $260 from $235 and maintained a ‘Neutral’ rating on the shares in light of the company’s fiscal Q1 earnings beats. The analyst commented that the company is well-positioned to increase margins in 2022 and displays upside potential.
On February 22, Valmont Industries, Inc. (NYSE:VMI) increased its quarterly cash dividend to $0.55 per share of common stock, up 10% from the prior dividend of $0.50 per share, or a rate of $2.20 per share on an annualized basis. The latest quarterly dividend was payable on April 15 to investors of record on March 25.
According to Insider Monkey’s data, 17 hedge funds held stakes in the company valued at $455.12 million at the end of the fourth quarter of 2021, down from 19 funds a quarter earlier, though the value of their collective positions rose from $424.28 million. As of December 31, 2021, Impax Asset Management was a leading shareholder in the company with a position valued at $204.66 million.
Valmont is experiencing high trading volumes in 2022 and is a zinc stock being picked by elite hedge funds. Other compelling zinc stocks hedge funds are pouring heavy investments into are Teck Resources Ltd (NYSE:TECK), Vale S.A. (NYSE:VALE), and Wheaton Precious Metals Corp. (NYSE:WPM).
5. HudBay Minerals Inc. (NYSE:HBM)
Number of Hedge Fund Holders: 17
Hudbay Minerals Inc. (NYSE:HBM) operates as a diversified mining company and explores base and precious metals in North and South America. The company produces copper, gold, silver, and zinc metals. Hudbay Minerals Inc. (NYSE:HBM) is a top zinc stock pick among elite hedge funds. According to Insider Monkey’s database, 17 hedge funds were long HudBay Minerals Inc. (NYSE:HBM) at the close of Q4 2021. The total stakes of these funds were valued at $360.19 million, up from $260.60 million in the prior quarter, when 13 funds were long HBM.
On February 23, 2022, Hudbay Minerals Inc. (NYSE:HBM) reported its fourth quarter 2021 results. The company registered EPS of $0.13 during the period, beating estimates by $0.01. Moreover, the company’s revenue came to $425.17 million, up 31.92% year-over-year. Earlier this month, Raymond James analyst Brian MacArthur raised his price target on Hudbay Minerals Inc. (NYSE:HBM) to CAD14 ($11.01) from CAD13 ($10.23) and maintained an ‘Outperform’ rating on the shares.
As of December 31, 2021, GMT Capital owns more than 32 million shares of Hudbay Minerals Inc. (NYSE:HBM). The fund upped its stake in the company by 2% during Q4, giving it a position worth $232.44 million at the end of 2022.
4. Hecla Mining Company (NYSE:HL)
Number of Hedge Fund Holders: 19
Hecla Mining Company (NYSE:HL) discovers, acquires, develops, and produces precious and base metal properties in the United States and internationally. The company mines silver, gold, lead, and zinc concentrates, as well as carbon material containing silver and gold.
Hecla Mining Company (NYSE:HL) reported its fourth quarter 2021 financial results in February. The company generated revenue of $185.08 million and registered EPS of $0.08 during the quarter, beating EPS estimates by $0.05. Hecla Mining Company (NYSE:HL) has been experiencing high trading volumes and is gaining momentum in the market, with the stock returning 17.44% year-to-date.
On April 12, Hecla Mining Company (NYSE:HL) announced its silver and gold production for the first quarter of 2022. The company reported silver production of 3.3 million ounces, up 3% over the fourth quarter of 2021, alongside gold production of over 41,000 ounces. Moreover, the company reported that lead and zinc production was in-line with the prior quarter. Shortly after, Roth Capital analyst Joe Reagor raised his price target on Hecla Mining Company (NYSE:HL) to $6.50 from $6.25, but downgraded the stock to ‘Neutral’ from ‘Buy’, noting that the company’s Q1 production did not meet market consensus but that this was offset by surging base metal prices.
19 hedge funds held long positions in Hecla Mining Company (NYSE:HL) at the end of the fourth quarter of 2021, up from 15 a quarter earlier. The collective stakes of these hedge funds came to $128.04 million, up from $101.85 million in the prior quarter.
Israel Englander’s Millennium Management increased its stake in Hecla Mining Company (NYSE:HL) by 291% during Q4, giving it more than 8.6 million shares of the stock worth $45.32 million as of December 31.
3. Wheaton Precious Metals Corp. (NYSE:WPM)
Number of Hedge Fund Holders: 24
Wheaton Precious Metals Corp. (NYSE:WPM) is a Canadian multinational precious metal streaming company. The company strategically invests in and secures deals with precious metals mining companies to gain access to various commodities such as zinc, copper, iron, gold, steel, and lead, among others. Wheaton Precious Metals Corp. (NYSE:WPM) boasts a streaming portfolio of metal purchase agreements with 24 operating mines along with eight development projects as of April 2022.
In March, Wheaton Precious Metals Corp. (NYSE:WPM) released its earnings report for the fourth quarter of 2021. The company delivered earnings per share of $0.29 and generated revenue of $278.20 million during the period. On April 21, Barclays analyst Matthew Murphy raised his price target on Wheaton Precious Metals Corp. (NYSE:WPM) to $49 from $45 and maintained an ‘Equal Weight’ rating on the shares. Wheaton Precious Metals Corp. (NYSE:WPM) shares are up 12.46% over the past year.
Wheaton Precious Metals Corp. (NYSE:WPM) was a part of 24 hedge funds’ portfolios at the close of the fourth quarter of 2021, with the total stakes of these funds valued at $490.69 million. As of December 31, 2021, First Eagle Investment Management is one of the most prominent shareholders in Wheaton Precious Metals Corp. (NYSE:WPM), owning over 16.4 million shares of the stock. The large investment accounts for 1.76% of the hedge fund’s Q4 13F portfolio.
2. Vale S.A. (NYSE:VALE)
Number of Hedge Fund Holders: 25
Vale S.A. (NYSE:VALE) is one of the largest metal mining companies in the world, operating through its Ferrous Minerals and Base Metals segments. In February, Vale S.A. (NYSE:VALE) reported earnings per share of $1.46 and revenue of $12.50 billion for the fourth quarter of 2021, beating EPS estimates by $0.65. Vale S.A. (NYSE:VALE) is one of the few zinc stocks that comes with hefty dividend payouts, boasting a forward yield of 15.98%.
On March 3, HSBC analyst Jonathan Brandt upgraded Vale S.A. (NYSE:VALE) to ‘Buy’ from ‘Hold’, while upping his price target on the stock to $21.50, up from $17.25. The analyst believes the Ukraine conflict will keep metal prices high given its ongoing supply-chain disruptions. Brandt adds that prices for the main metals of Vale S.A. (NYSE:VALE), including iron ore, copper, and nickel, will continue to rise driven by supply issues and strong demand.
By the end of the fourth quarter of 2021, 25 hedge funds held stakes in Vale S.A. (NYSE:VALE), with the total value of those stakes coming in at $1.71 billion. Of those 25 funds, Fisher Asset Management was the largest shareholder, having a $434.32 million position in the company.
Miller Value Partners mentioned Vale S.A. (NYSE:VALE) in its third-quarter 2021 investor letter. Here are the fund’s comments:
“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.”
1. Teck Resources Ltd (NYSE:TECK)
Number of Hedge Fund Holders: 40
Teck Resources Ltd (NYSE:TECK) engages in exploring for, acquiring, developing, and producing natural resources in Asia, Europe, and North America. It operates through five segments: Steelmaking Coal, Copper, Zinc, Energy, and Corporate.
On March 31, Teck Resources Ltd (NYSE:TECK) announced that it has agreed to satisfy the remaining purchase price for Bunker Hill Mining’s Pend Oreille Mill. Bunker Hill Mining has also agreed to grant Teck Resources Ltd (NYSE:TECK) an exclusive option to acquire 100% of the zinc and lead concentrate production from the Bunker Hill Mine for an initial term of five years after the mine has commenced production of concentrates.
In February, Teck Resources Ltd (NYSE:TECK) reported that its revenue for the fourth quarter of 2021 came to $3.44 billion, up 70.38% year-over-year, while its earnings per share of $1.98 beat estimates by $0.11. Teck Resources Ltd (NYSE:TECK) has delivered 65.07% returns to investors over the past 12 months.
Barclays analyst Matthew Murphy raised his price target on Teck Resources Ltd (NYSE:TECK) to CAD55 ($43.27) from CAD40 ($31.47) in April and reiterated an ‘Equal Weight’ rating on the shares. Murphy believes the demand for copper and gold will soar even the amidst supply issues triggered by the current geopolitical situation.
Hedge funds are betting big on Teck Resources Ltd (NYSE:TCK). At the close of the fourth quarter of 2021, 40 hedge funds were long TCK, with stakes valued at $1.62 billion. Soroban Capital Partners was the most prominent shareholder in Teck Resources Ltd (NYSE:TCK) among that group, owning more than 11 million shares worth $318.59 million.
For more compelling commodity stocks to consider adding to your portfolio, check out the 10 Best Copper Stocks to Buy Now and the 10 Best Battery Stocks to Buy Now.
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Disclose. None. Top 10 Zinc Stocks Picked By Hedge Funds for 2022 is originally published on Insider Monkey.
