Because copper remains one of the most widely used metals, covering a range of different applications, stocks with exposure to this crucial commodity are widely followed by investors across the globe. Copper is not only fundamental to the world’s industries and to wider development but its price is also seen as being one of the leading indicators of the global economy. For this reason, Copper stocks have also gathered a reputation of being ideal inflation-hedging stocks. With the fears of a global recession impending, Copper prices had seen a steady decline throughout the prior months. The situation now appears less dire, and with the relaxation of Covid-19 restrictions on China, demand may see a surge in the short term.
Many in the market perceive the present situation as being an ideal entry point for those looking to invest in Copper stocks. In light of this, we bring to you some of the best options for you to consider, which will ensure long-term portfolio growth.
Copper Mountain Mining Corporation
To start off our list of the top copper stocks, we present Copper Mountain Mining Corporation (OTC: CPPMF). Copper Mountain is a Canadian company with assets in both Canada and Australia, which explores copper, gold, and silver. As its name suggests, however, copper is the prime focus of the company’s entire business model.
CPPMF is a great copper stock for those seeking exposure to this lucrative industry. There are several reasons to believe the company could boost its organic production in the short term, given some key information delivered by its management. For one, the company has in the works some substantial plant improvements, which include a massive expansion of the floatation circuit of its flagship project, Copper Mountain, in Canada. Copper Mountain is in its fourth phase of the extraction cycle, and the expansion would allow for enhanced copper recovery. To further enhance extraction, the discovery of higher-grade copper within the site will result in fewer impurities and therefore higher overall production.
Moreover, the company’s Eva copper project in Queensland, Australia has achieved a new milestone post-discovery, which will allow for a surge in its production. The CPPMF management remains certain that each of these positive updates could see present levels of production almost tripling in the next couple of years. As per the company’s recent balance sheet, CPPMF holds $85.5 million in cash holdings, and inventory of up to $32.7 million. This indicates that the company is very much in a financial position to sustain, as well as capitalize upon the oncoming growth it has set itself up for.
Capstone Copper Corp.
Moving on, we take a look at another Canadian mining company, Capstone Copper Corp. (TSX: CAD). Capstone primarily focuses on copper mining throughout the Western hemisphere, particularly in the north and central Americas. Owing to falling copper prices worldwide, as well as the fears of a looming recession, Capstone had seen a fall of nearly 50% in the last six months alone. This comes despite its top and bottom lines improving 70.3% and 86.2% on a year-on-year basis, in its quarterly release for June 2022. This fundamental improvement alone suggests a serious undervaluation of the stock, which is due for a significant correction in the short term.
To add to Capstone’s prospects, its management had recently announced a critical update relating to its Mantos Blancos project. According to Capstone, the Mantos Blancos Concentrator Debottlenecking project has been a major success and has met all the objectives that had been laid out. In non-technical terms, this would allow the company to extract higher volumes of copper in the site, for a longer duration of time. The combined result of both these aspects is a larger gap between the company’s actual and target price. CAD, therefore, presents a stellar opportunity for long-term growth.
Imperial Metals Corporation
For the third copper stock on our list, we turn to Imperial Metals Corporation (OTC: IPMLF). Imperial Metals stands as one of the best-positioned stocks to capture the oncoming copper boom and has been incorporated as far back as the 1950s. This gives the company a rich experience, which allows it to maneuver through the metals industry, amidst wider uncertainties.
IPMLF holds significant exposure to rising copper prices, given its 100% ownership of Mount Polley, within which seven copper mining leases are included. Similarly, the company also owns a 30% stake in the Red Chris, which is an open pit gold and copper mine that delivers 30,000 tons of metal per day. Imperial Metal’s profile as well as its strategic positioning make it of the best names in the Copper industry for one to bet on. Similarly, it is also one of the safest stocks on this list, as it delivers complete exposure to copper gains, whilst also cushioning against volatility. It does this given its wider exposure to other metal classes such as gold, lead, and zinc. At present, the company’s cash holdings and inventory stand at $37.1 million and $25.1 million, respectively. Moreover, Imperial Metals is fully debt-free, which further enhances its overall safety factor for investors.
Tech Resources Limited
Number four copper stock on our list is the metals mining giant, Tech Resources Ltd. (NYSE: TECK) The company, is valued at almost $20 billion, indicating the scale of its business. Although TECK presently stands as the world’s largest Zinc producer, it has disclosed its ambitions to heavily enhance its copper exposure. Specifically, the company aims to increase its copper output by a staggering 530% by the end of the decade, and become a top 10 producer of the lucrative metal.
This shift has just opened up a substantial opportunity in the world of copper for investors looking to climb aboard the growth train. TECK brings some excellent strengths, which other copper stocks simply do not compete with. For one, the company brought in record high-performance gains in its recent quarterly results with revenue jumping by a whopping 126% to $4.5 billion, on a year-on-year basis. During the same period, EPS more than quadrupled from $0.39 to $2.43. Despite these mind-blowing results, TECK has an incredibly low PE ratio of 4.32 in comparison to its peers, which have a median PE figure of 12.35, making its valuation not just attractive, but extremely attractive. Similarly, its buyback programs are aimed at returning value to shareholders in a strategic and timely manner.
TECK has all the great markings of a stock that is a screaming buy. The stock is likely to soar in the long term.
Lundin Mining Corporation
The last copper stock on our list is that of Lundin Mining Corp. (OTC: LUNMF). Lundin is a diversified base metal miner with a truly global presence. With a presence in Argentina, Brazil, Portugal, Sweden, and the United States, the company has an extensive copper supply chain network. This factor alone gives Lundin a tremendous competitive edge over its peers.
A recent technical report on the company’s Candelaria plant demonstrates that it is fully able to maintain an output of 29 million tons of ore per annum until at least 2040. This mine, in Chile presently reflects nearly 44% of Lundin’s total revenue. Considering that the present value of the Candelaria plant alone amounts to over $5 billion, the company’s total market capitalization of $4.4 billion may be up for serious upward correction. This is especially true when factoring in all other mining sites and assets which account for 56% of Lundin’s revenues.
As per the company’s latest quarterly release, it has a total cash holding of $498 million, and an asset total of $8 billion. This indicates the robust financial position the company holds, as well as promising prospects. Lundin offers stability and predictable growth, for all those seeking to win big in the copper industry.
The opportunity present in the copper stocks has gone far too long unnoticed. It is about time the market turns focus toward this lucrative metal. Following the brief price dip since the start of the year, the forward-looking opportunity looks especially promising. This is especially so because Chinese industries are likely to resume full-throttle operations in the coming months, as a result of the relaxations of Covid-related restrictions. Each of the stocks in this list is highly likely to fly high in the upcoming demand surge that copper is on the verge of experiencing.