Top Mining Stocks for Q4 2021

This article was originally published on this site

Many investors historically have turned to safe haven assets such as precious metals in times of economic and political turmoil. One way to gain exposure is by owning companies in the metals and mining industry, which are involved in the exploration, extraction, and sale of metals and other minerals. These materials are used in a wide range of applications in jewelry making, industry, technology, aviation, aerospace, and more. Some of the industry’s biggest companies globally include Franco Nevada Corp. (FNV) and Wheaton Precious Metals Corp. (WPM).

Mining companies have vastly outperformed the broader market in the last year. The benchmark SPDR S&P Metals & Mining ETF (XME) has provided 1-year trailing total returns of 83.8% compared with 35.8% for the Russell 1000 Index. All figures throughout are as of Sept. 9, 2021.

Here are the top 3 mining stocks with the best value, the fastest earnings growth, and the most momentum.

These are the mining stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.

Best Value Mining Stocks
  Price ($) Market Cap ($B) 12-Month Trailing P/E Ratio
Gran Colombia Gold Corp. (GCM.TO) CA$4.64 CA$0.5 3.3
Impala Platinum Holdings Ltd. (IMPUY) 13.15 10.7 3.4
Sibanye Stillwater Ltd. (SBSW) 14.29 10.4 3.4

Source: YCharts

  • Gran Colombia Gold Corp.: Gran Colombia Gold is a Canada-based gold producer with mining operations in Latin America. The company explores for and develops gold and silver in Colombia, where it operates several mines at its high-grade Segovia Operations. Gran Colombia Gold also has shares that trade over-the-counter (OTC) in the United States under the ticker symbol TPRFF. For Q2 2021, the company reported net income of $29.8 million versus net loss in the year-ago quarter, as well as a 24.9% year-over-year (YOY) increase in revenue driven by an increase in its realized gold price.
  • Impala Platinum Holdings Ltd.: Impala Platinum Holdings mines, refines, and markets platinum, palladium, rhodium, nickel, and related metals. The company’s primary mining operations take place in South Africa and Zimbabwe.
  • Sibanye Stillwater Ltd.: Sibanye-Stillwater is a South Africa-based producer of precious metals. The company develops and extracts mineral properties. It maintains operations in North and South America as well as southern Africa. Sibanye reported record profits for H1 2021. The company’s total profits climbed by roughly 160% YOY. Sibanye also announced record adjusted free cash flow for the half, thanks to improved operational performance and commodity prices.

These are the top mining stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.

Fastest Growing Mining Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
Lundin Gold Inc. (LUG.TO) CA$11.03 CA$2.6 N/A (see company description) 1,360
Largo Resources Ltd. (LGO.TO) CA$16.45 CA$1.1 N/A (see company description) 476.0
First Majestic Silver Corp. (AG) 12.43 3.2 N/A (see company description) 340.4

Source: YCharts

  • Lundin Gold Inc.: Lundin Gold is a Canada-based mining company. Lundin owns and operates a set of gold projects primarily in southeast Ecuador. The company also has shares that trade OTC in the U.S. under the ticker FTMNF. Lundin generated $50.0 million of net income for Q2 2021 versus a net loss the prior-year quarter. Its EPS also went from negative to positive, so it’s not possible to calculate an EPS growth figure for the table above. The company said it achieved record operating cash flow during the quarter.
  • Largo Resources Ltd.: Largo Resources is a Canada-based mining company specializing in vanadium, a malleable, metallic element used mainly to form alloys and in catalysts. The company produces vanadium flake and powder at mines located in Brazil. The company also trades on the Nasdaq under the ticker LGO. Largo Resources’ EPS went from negative to positive for the most recent quarter, making a YOY EPS growth calculation impossible in the table above.
  • First Majestic Silver Corp.: First Majestic Silver is a Canada-based mining company engaged in the exploration, development, and production of mineral properties. The company is focused on mining gold and silver throughout Mexico. First Majestic reported net earnings growth of more than 700% and record quarterly revenue of $154.1 million for Q2 2021.

These are the mining stocks that had the highest total return over the last 12 months.

Mining Stocks With the Most Momentum
  Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Ferroglobe PLC (GSM) 8.86 1.6 1,940
American Battery Metals Corp. (ABML) 1.40 0.8 1,400
Alpha Metallurgical Resources Inc. (AMR) 51.18 0.9 1,180
Russell 1000 Index N/A N/A 35.8
SPDR S&P Metals & Mining ETF (XME) N/A N/A 83.8

Source: YCharts

  • Ferroglobe PLC: Ferroglobe is a U.K.-based silicon and specialty metals mining company. The company produces aluminum, silicone compounds used in the chemical industry, ductile iron, automotive parts, and photovoltaic cells, and related products. The company moved to a net profit in Q2 2021 from a net loss in Q2 2020 on a 67.4% YOY increase in sales.
  • American Battery Metals Corp.: American Battery Metals Corp. recycles lithium-ion batteries. The company also engages in exploration of battery metals mining properties and extraction of battery metals. The company is in the process of changing its name to American Battery Technology Company. On Aug. 30, the company announced that current company chief technology officer Ryan Melsert had been appointed CEO, replacing outgoing CEO Doug Cole.
  • Alpha Metallurgical Resources Inc.: Alpha Metallurgical Resources is a mining company that supplies metallurgical products to the steel industry. The company’s operations are primarily located in Virginia and West Virginia.

The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

Source: Investopedia