Are these the right mining stocks for your watchlist?
Investing in mining stocks can be difficult if you don’t know what to look for. Developing an investment strategy can help a lot when investing in this sector. Mining stocks have a few key things that can impact their stock prices. The first of which, are the prices of the materials a company mines for. For example, if gold prices move upwards significantly it is likely that most gold stocks will follow suit.
Material prices are not the only thing that affects the price of mining stocks. Company performance based on filings, financials, reports, mine updates, rumors, and speculation are all things that can cause a mining stock to go up or down. Acquisitions are big in the mining world, and quite a few have taken place in the last year that were significant. Acquisitions cause mining stock prices to move too.
Let’s talk about two of the most popular mining niches for a moment. Gold stocks and silver stocks saw huge gains last year after the economy crashed causing increased metal prices. In 2021, these metals are in an interesting spot. Gold is in the $1,700 per ounce range, and has been unable to push back above $1,800. Silver is in a similar situation, staying within the $25-$27 range. While it seems bad on the surface that the metals are unable to move higher, it is good that they are staying in their key price points.
Another industry showing positive strides is copper stocks. Copper prices have increased by a large margin recently. Part of this success can be attributed to electric vehicles performing so well. Most battery-powered EVs use nearly 200lbs of copper per car, compared to 18-49lbs on average in a normal car. As electric vehicle demand grows rapidly, with companies like Tesla selling millions of vehicles every year, it is likely that copper could continue to grow. Keeping all of this information in mind, let’s now look at three mining stocks to watch with higher volumes.
Mining Stocks To Watch
Gerdau S.A. (NYSE: GGB)
Before the pandemic started, Gerdau S.A. could’ve been considered a mining penny stock. In the last year and few months, the company has experienced enough momentum to escape this term. Now Gerdau S.A. is over $6.40 per share which passes the penny stock maximum of $5 per share. But who is Gerdau S.A.? Gerdau is a steel company offering billets, blooms, and slabs among many other products.
On May 5th, Gerdau released its latest earnings. As mentioned above, earnings can often have a great effect on a company’s stock price. Gerdau reported income of $459.22 million, which was much higher than it was one year ago. This occurred as a result of higher metal prices and better currency rates. The company’s profit grew more than tenfold, and its revenue grew 77% too. This all happened despite its steel production falling 1% and sales increasing 15%.
GGB stock is a perfect example of how financial reports can affect a company’s stock price. On the day of the reports, GGB stock climbed more than 7%. If you look Gerdau’s one-year charts, it is very impressive. This company has grown over 180% in the last year so far. About 30% of this growth has been in 2021 so far.
IAMGOLD Corporation (NYSE: IAG)
IAMGold Corporation is a gold mining company based in North America, South America, and West Africa. The company owns the Rosebel mine, Essakane mine, Westwood mine, and many more. It also has various exploration and development level projects. IAMGOLD has experienced some upwards momentum in the market amid its first quarter 2021 results release.
While its revenue and net earnings fell year over year, its operating cash flow of $102 million is solid. The President and CEO of IAMGOLD Gordon Stothart said, “In the first quarter 2021, the IAMGOLD team made good progress toward our operating and development goals. Our operations generated $89.5 million in mine-site free cash flow and we ended the quarter with approximately $1.5 billion in available liquidity.”
After the earnings report was released, IAG shares jumped 2.9%. All of its construction seems to be on track at the moment despite COVID restrictions holding it back. While its gains are not huge, this could potentially be the push that IAG stock needs to start seeing upside again.
Rio Tinto Group (NYSE: RIO)
The market for copper is doing extremely well at the moment, and Rio Tinto Group is benefitting from it. Copper prices, as mentioned at the start of this article, are primarily increasing because of electric vehicles and demand. If copper prices continue to rise it could be great for Rio, but what is the company? Rio Tinto is a mining and exploration based copper, gold, aluminum, iron ore, and diamonds company.
Rio Tinto recently announced that it would be keeping all of its current guidance ranges in place. This good news comes as the company releases some operational results. The CEO of Rio Tinto Jakob Stausholm said, “We have set out clear priorities to develop a stronger Rio Tinto. Our focus is to become the best operator, strive for impeccable ESG credentials, excel in the development, and secure a strong social license. This ambition will enable us to continue to deliver superior returns to shareholders, invest in sustaining and growing our portfolio, and make a broader contribution to society.”
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Stausholm seems very hopeful for the future of the company. In the last month RIO shares have increased by more than 11%. Nearly 4% of this alone was on May 5th. A lot of this can be attributed to rising copper prices and other metals increasing in value too.
Mining Stocks In May
In May there has been plenty of mining stocks seeing gains already in the first week. Could this mean there is a lot of potential for mining stocks this month? When the world is in such a volatile state it can be hard to tell. What we do know is that gold and silver are staying around their current price points. Copper, iron ore, and steel are seeing huge price increases based on demand for the metals. Which mining stocks will you be keeping in mind next time you invest?
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