Should Investors Be Buying These Top Copper Stocks Now?
Copper stocks have been on the rise in the stock market in recent years, as the global economy has begun to rebound from the recession. In brief, demand for copper is driven by many factors. Notably, industrial production and construction activity to name a few. Also, copper is used in a variety of applications such as electrical wiring and plumbing. As a result, copper stocks are closely watched by investors as a barometer of economic activity.
The price for copper has and continues to rise among supply chain bottlenecks, dwindling stockpiles, and the ongoing clean energy transition. In fact, investors have many copper stocks to choose from in this space. For example, let’s take a look at BHP Group (NYSE: BHP). This multinational mining firm produces millions of tonnes of copper on an annual basis. Meanwhile, even gold companies like Newmont (NYSE: NEM) are active players in the copper sector as well.
In recent years, copper stocks have been bolstered by strong demand from China. In fact, China is the world’s largest consumer of the metal. However, rising copper prices have also led to increased production costs, which has weighed on margins for copper producers. With that, here are three trending copper stocks to watch in the stock market today.
Copper Stocks To Watch In August 2022
- Freeport-McMoran Inc. (NYSE: FCX)
- Southern Copper Corporation (NYSE: SCCO)
- Teck Resources Ltd (NYSE: TECK)
Freeport-McMoran (FCX Stock)
Starting off the list today is, Freeport-McMoran Inc. (FCX). The company is one of the world’s leading producers of copper. Freeport-McMoran mines and smelters are located in North and South America, Asia, and Africa. Additionally, the company’s copper is used in a variety of applications. This includes electrical wiring, roofing, plumbing, and coins. Also, Freeport-McMoran’s products are utilized in many industries. This includes construction, automotive manufacturing, and electronics.
Just last month, the mining company reported its second quarter 2022 financial results. In them, Freeport-McMoran reported weaker-than-expected earnings for the quarter. Specifically, the company reported earnings of $0.58 per share on revenue of $5.4 billion. This is in comparison to the consensus earnings estimate of $0.76 per share, and revenue estimates of $6.5 billion. Also, the company posted a 5.8% drop in revenue on a year-over-year basis. For a sense of scale, in this quarter the company totaled 1.1 billion pounds of copper, 476 thousand ounces of gold and 20 million pounds of molybdenum.
Richard C. Adkerson, Chairman, and Chief Executive Officer, commented in his letter to shareholders, “FCX is in a position of strength as we navigate the current global market uncertainties. The actions we have taken in recent years to build a strong balance sheet, successfully expand low-cost operations, and maintain flexible growth options will allow us to manage the current market situation in an effective manner while preserving substantial future asset values. Despite near-term uncertainties, the long-term market fundamentals and value opportunities for our stakeholders remain extraordinarily favorable.” Shares of FCX stock, have recovered over 11% in the last month of trading action. As of Wednesday afternoon, FCX stock currently trades at $30.48. With that, will you be adding FCX stock to your copper stocks watchlist?
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Southern Copper Corporation (SCCO Stock)
Next, we have Southern Copper Corporation (SCCO). In brief, Southern Copper Corporation is one of the world’s largest copper producers. The company’s main focus is mining, milling, and smelting of copper, as well as the production of precious metals. Southern Copper has operations in Chile, Peru, Mexico, and the United States. In addition to copper, Southern Copper produces gold, silver, molybdenum, and zinc.
Next, last month, Southern Copper announced weaker-than-expected for its second quarter 2022 financial results. In detail, the company reported earnings per share of $0.56 on revenue of $2.3 billion. Analysts’ estimates for SCCO this quarter were earnings of $0.95 per share. Furthermore, SCCO saw a 20% drop in revenue on a year-over-year basis.
Year-to-date, shares of SCCO stock have fallen over 20%, which could make it an attractive investment for investors right now. As of Wednesday afternoon, shares of SCCO stock are trading at $48.23 a share. Considering this, do you think SCCO is a top copper to watch right now?
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Teck Resources (TECK Stock)
Last but not least, let’s dive into Teck Resources (TECK). Teck Resources Ltd. is a Canadian mining company that produces copper, with operations and projects in Canada, the United States, Chile, and Peru. Teck is Canada’s largest diversified mining company. In detail, Teck’s primary products are copper, zinc, and coal. Teck also owns a majority interest in Teck Cominco Metals Ltd., which produces lead, zinc, and silver.
In July, Teck Resources announced its unaudited second quarter 2022 earning results. Diving in, the company reported Q2 earnings of $2.55 per share on revenue of $4.5 billion. For context, wall street consensus estimates were $2.32 a share, with revenue of $4.2 billion. As a result, TECK reported stronger than expected second-quarter financial results. What’s more, the company was able to notch a 117.8% increase in revenue compared to the same period in 2021. What’s more, the company’s copper business unit gross profit advanced 5% from a year ago, supported by an average realized copper price of US$4.28 per pound and copper sales volumes of 75,800 tonnes. Shares of TECK stock are up over 26% in the last month of trading action. The stock is currently trading at $34.49 on Wednesday afternoon.
“This marks Teck’s fourth consecutive quarter of record-setting EBITDA and profitability, driven by strong commodity prices in the quarter, which enabled us to complete $572 million in share buybacks and pay down a further US$650 million in outstanding debt,” stated Don Lindsay, President and CEO. “Our solid operational performance, strong balance sheet and $8.4 billion in liquidity all put Teck on a very strong footing as we manage through inflationary pressures and a slowdown in the global economy.” All in all, is TECK stock on your radar now?
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