What are the Top Copper stocks to buy in Q2 2021?
Copper is one of the most versatile metals on the market. From wiring in homes, construction, and electronics to plumbing and electric cars, copper can be found in so many different things.
That’s what makes copper such a worthwhile investment because you know how widely used it already is and will likely continue to be.
Despite its versatility and practicality, copper investment tends to be overlooked when compared to other metals. Understanding why copper stocks in 2021 are overlooked can help you make some smart investment choices.
What To Know About Copper Stocks
Unlike other precious metals such as gold, which tends to thrive in economic downtimes, copper does not.
Since copper is so widely used for construction, electronics, and new technologies, its price takes a hit when the economy slows down. The lack of demand for products that contain copper goes down, so does its stock price.
And as you know, the economies around the world are still figuring out the best ways to lift themselves out of the pandemic-related shutdowns.
So, while copper took a hit over the past year, news of vaccines and reopenings are good signs for copper stocks in 2021. As time moves along, barring no setbacks in economic reopenings, copper’s future could look very promising.
Copper’s performance in Q1 2021
Taking a look at copper stocks in 2021, its quarter 1 (Q1) performance was remarkably better than the first 3 quarters of 2020. As stated previously, economic shutdowns are not good for copper stocks.
But as marketplace conditions improve, the demand for copper has risen again. The two main driving factors behind the rising price of copper are China’s buying spree and the increased demand for renewable energy.
Among the big buyers of copper is China, where many electronics, electric cars, and other copper-related products are made.
China’s buying spree is being met by supply shortage since mines have been heavily impacted by the global pandemic. When there’s high demand and short supply, you can bet the price will soar.
Some experts believe that copper will reach a new high point very soon, as the demand for copper will only go up as economies reopen.
On top of that, the demand for renewable energy continues to go up as well, and copper is vital to renewable energy technologies.
Suffice to say, copper stocks in 2021 are definitely worth keeping your eye on in Q2 of 2021.
What to expect for Q2 2021
Moving into Q2 of 2021, copper stocks should continue to rise in price as global demand rises. The second quarter of 2021 should feature more growth in the copper industry.
Despite slip-ups in the first three quarters of 2020, the copper industries Q2 of 2021 should continue the growth trend started in Q1.
As an investor, you may want to get yourself familiarized, if you’ve not already, with coppers stocks to buy in 2021.
Continue reading to learn which coppers stocks have the most momentum and which stocks to keep an eye on as the year continues.
Copper Stocks With the Most Momentum
As the year rolls on, copper stocks should continue to grow in price. Some experts believe copper is headed towards a new high price. So If you’d like to jump onto the copper bandwagon, here are some copper company stocks with the most momentum.
Capstone Mining Corp
As a Canada-based company, Capstone Mining Corporation mines and produces copper, zinc, silver, iron, and gold. The company has copper mines, one in the US and another in Mexico in addition to a 70% interest in a project in Santo Domingo, Chile. In the final quarter of 2020, their net income more than doubled, as revenue grew over 30% year-over-year, (YOY). Additionally, the company managed to exceed both production and cost guidance for all of 2020.
Copper Mountain Mining Corp
Similar to the above company, Copper Mountain Mining is Canadian-based with a primary focus on copper mining operations. The company’s main source of revenue is a mine located in British Columbia appropriately named Copper Mountain. This mine alone produces about 100 million pounds of copper each year, making it a prime target for copper investment.
Turquoise Hill Resources Ltd
You may be noticing a theme here, as the final mining company listed is yet again a Canada-based company. Turquoise Hill Resources conducts copper and gold mining in southern Mongolia, specifically the Oyu Togli mine. The company posted some impressive numbers in the final quarter of 2020, increasing revenue and income significantly YOY. Despite a recent shake-up in leadership at the company, this stock should continue its momentum into 2021.
Industry Performance & Rank
The copper industry falls under the Basic Materials sector, which increased in growth by about 18.1% over 2020.
It’s no secret that the Basic Materials sector had a rough stretch of three straight quarters in the red. However, the last quarter of 2020 showed promising signs for copper stocks in 2021.
Although it improved in the Q4 of 2020, the earnings for 2020 in this sector are expected to be slumped by about 21%. This is due to the decline in the previous three quarters.
Most of the blame for the decline in the Basic Materials sector can be put on the ongoing pandemic. Now, with vaccines and reopenings in place, significant growth is expected.
In fact, the earning growth projection for this sector is about 40.5%, making it a perfect opportunity for you to invest in.
5 Copper Stocks to Keep an Eye On
With your knowledge of how the copper industry has fared in 2020 and will fare in 2021, you should keep your eye on several stocks. The companies below all show positive signs of growth, with some being due to their investments in smart technologies.
Others have focused their efforts on reducing debt and making their processes more efficient. In either case, some of these are the best value copper stocks because they have a low price-to-earnings ratio. A low ratio means you’re paying less for each dollar that is generated in profit.
Southern Copper Corporation (SCCO)
SCCO is a Phoenix, AZ-based company that mines, explores, smelts, and refines copper among other minerals.
This company is heralded for its large copper reserve, high-quality operations, and focus on low-cost production. SCCO has made more efforts to expand production in Peru since it’s the second-largest producer of copper.
Along with being the large copper producer, Peru also holds about 13% of the world’s copper reserves. Southern Copper has invested heavily in Peru mining productions, with nearly $8 billion invested so far.
BHP is based in Melbourne, Australia, and its focus is on oil, gas production as well as copper, silver, zinc mining to name a few. This company has made efforts to invest in smart technology that should help it reduce costs across its entire value chain.
As it continues reducing costs, the company’s profit margin should grow. As of now, BHP has six major projects that will help it grow in the long run. Among these six projects is copper mining.
Kaz minerals is a parent company based in the UK, whose subsidiaries mine in copper, gold, silver, and zinc. The area they primarily focus on is Kazakhstan and Kyrgyzstan.
Kaz Minerals is set to grow due to its large scale at low-cost open copper pit mines. This company also invests in new technology in order to help keep costs low and profits high.
Kaz Minerals is preparing to expand its Aktogay project later this year, which is carrying a $1.2 billion budget. The project alone should boost copper productions for Kaz Minerals by roughly 80,00 tons from 2022-2027.
Freeport is a company based in Phoenix, AZ that primarily focuses on mineral exploration and development along with copper mining and milling. The company also deals with smelting and refining copper concentrates and mining other metals.
This company implements cost-effective management and makes efforts to reduce its debt levels. Currently, Freeport is focusing on opportunities to expand revenues by exploring activity near existing mines.
Large-scale expansions in a project at Cerro Verde should provide nearly 600 million pounds of copper in incremental annual production. Freeport recently completed a project that put it on track to annually produce approximately 200 million pounds of copper.
Coeur Mining, Inc
As a company based in Chicago, IL their main focus is on exploring, developing, and producing gold, silver, lead, and zinc. This company has five operations spread across the US, Mexico, and Canada.
Currently, Couer’s is conducting its largest project yet, primarily focusing on new discoveries and resource expansion. Their goal is to create value through exploration.
In Q3 of 2020, Coeur Mining reached a milestone. Its commenced construction on the POA 11 expansion project in Rochester was on schedule. This allows the company to operate at full capacity until 2033.
Courier Mining has strong operational execution at several locations and continues its efforts to lower debt to drive results.
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