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Copper prices climbed to a four-year high of US$3.28 per lb. recently, rallying ~11% from a low in early December. Today, we've identified four copper stocks and their current discounted valuation multiples.  The original article has been edited for length (…) and clarity ([ ]) by munKNEE.com to provide a fast & easy read. For all the latest - and best - financial articles sign up (in the top right corner) for your free bi-weekly Market Intelligence Report newsletter (see sample here) or visit our Facebook page.
I base that opinion not so much on the fundamentals or a technical reading of the charts ? or anything overly scientific for that matter, but rather on a gut feeling that comes with being in the gold business for 45 years. When all is said and done for 2018, after all the factors have been weighed and measured, I see sentiment ? a thing that cannot be measured or weighed ? emerging as the principal determinant for gold in 2018. In addition to a strong year for the base metal, which is up ~30% Y/Y, copper demand is expected to remain robust during 2018. China, which accounts for half of global copper demand, saw imports of copper rise to 329,168 tonnes in November, up 19% Y/Y. In addition, the risk of labour strikes in Latin America could serve as a potential catalyst for copper prices. According to analysts at Citi, over 30 labour contracts, covering about five million tonnes of mine supply, are set to expire in 2018, primarily in Chile and Peru.  1. Hudbay Minerals Inc. (TSX:HBM)
Base Metals
Hudbay Minerals is a Canada-based copper-zinc producer with assets in Canada (Snow Lake and Flin Flon, Manitoba) and in southeastern Peru, 100 kilometers south of Cusco. - Market Cap: $2,908 Million
- Price/Cash Flows Per Share (2018): 4.5x
- Peer Average: 6.4x
- Month over Month Return: 14%
 2. Teck Resources Ltd. (TSX:TECK.B)
Specialty Mining & Metals
Teck Resources is one of Canada's largest resource companies with interests in 13 mines and 6 projects in Canada, Peru, Chile and the United States focused on the production and exploration of copper, zinc, coal and energy. - Market Cap: $18,695 Million
- Price/Cash Flows Per Share (2018): 4.8x
- Peer Average: 6.8x
- Month over Month Return: 12%
 3. First Quantum Minerals Ltd. (TSX:FM)
Base Metals
First Quantum Minerals produces copper, gold, nickel and zinc from seven mines and one copper smelter across six countries. - Market Cap: $11,802 Million
- Price/Cash Flows Per Share (2018): 6.4x
- Peer Average: 6.8x
- Month over Month Return: 28%
 4. Freeport-McMoRan Inc. (NYSE:FCX)
Base Metals
Headquartered in Phoenix, Arizona, Freeport is the world's largest publicly-traded copper producer. The Company's diverse portfolio of assets, includes the Grasberg minerals district in Indonesia; one of the world's largest copper deposits, along with the Morenci minerals district in Arizona and the Cerro Verde operations in Peru. In total, the Company has 10 operating mines, seven of which are in North America. - Market Cap: $27,900 Million
- Price/Cash Flows Per Share (2018): 5.6x
- Peer Average: 6.8x
- Month over Month Return: 33%
Scroll to very bottom of page & add your comments on this article. We want to share what you have to say! Related Articles From the munKNEE Vault: 1. Forget Gold! Got Copper? Super Boom In Copper Demand Coming ? Here's Why Some basic math shows that the coming electric car boom will create a super boom in copper demand. In 2016, EVs made up 1.6% of the total U.S. car market and it is expected that EVs will make up 4% by 2021 and - get this - by 2030, the adoption of EVs in the U.S. will be 34%. What does that mean for copper demand? 2. 4 Copper Stocks Trading at a Discount to Future Cash Flows We have identified four Canadian copper stocks that have declined 9.3% on average, underperforming their benchmark Global X Copper Miners ETF (COPX) which has only declined 6.4%. In addition, the stocks covered trade at Forward Price to Cash Flow Ratios (NTM) well below their peer average of 5.31x. 3. Marin Katusa: ?I expect to make +300% in coming copper rally!? Here's Why & How I plan to accumulate stakes in some of the world's best copper deposits. Why? Because copper has become a great way to invest in the green energy super-trend and I expect to make at least 300% in the coming copper rally over the next five years. 4. These Copper Stocks Are Trading Below Their Peers Today, we have identified those Canadian copper stocks that are trading below an Enterprise Value to Sales multiple of 3.5x, which is the current peer average for junior copper miners. 5. These 5 Junior Mining Stocks Would Benefit Most From A Further Copper Price Increase A 20-month high in the copper price, amid supply concerns and growing demand from increased infrastructure spending by governments. Today, we have identified five junior mining stocks that would benefit most from a further rise in the copper price. 6. What Does Current Gold-to-Copper Ratio Mean For Future Price of Gold? The gold-to-copper ratio, a key indicator of global economic health, is indicating that global economic health is improving which will apply further pressure to gold over the short term. 7. 4 Canadian Copper Stocks Shining on Trump Infrastructure Speculation With $500 billion to $1 trillion in potential infrastructure spending planned by the incoming Trump administration, the price of copper has risen along with the 4 Canadian copper stocks on our list. 8. A Direct Comparison Between Gold, Silver, Platinum and Copper Here's an updated analysis of physical gold, silver, platinum and copper regarding their respective versatility of use, durability, fungibility, store of value, liquidity and aesthetics. 9. Copper's Largest & Most Important Producing Countries Copper is one of the most important and popular industrial metals in the world. With 3% per year production growth since 1900, approximately 16 million tons of the metal was produced in 2011, according to the International Copper Study Group. Below, we outline some of the largest and most important copper-producing nations across the world: 10. Copper: The Nervous System of Our Society ? Here's Why Copper is one of the most widely used metals on the planet, and has been for more than 10,000 years. Today, it's the nervous system of our society - of our cities, homes, tools and toys. The simple truth is that the western lifestyle is completely dependent on copper. Here's why as depicted in the infographic below. 11. The Implications of Coming "Peak Copper" for America ? and the World! About two years ago, I looked through a BHP Billiton presentation which listed the number of years remaining for particular commodities. It was not an analysis of ?peak? commodities as such, just a report on when various commodities would be completely, 100% depleted based on current usage rates and reserve assumptions. Copper in that report was determined to be scarcer than oil! [What does that mean for the future well-being of the U.S. - and the world?] Words: 1380 The post These 4 Copper Stocks Trade At Discounted Valuation Multiples Compared With Their Peers appeared first on munKNEE dot.com. |
