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4 Copper Stocks To Watch Right Now

Copper stocks are set to benefit from the rising copper prices.

Should Investors Buy Copper Stocks In The Stock Market Today?

In the stock market today, a lot of the headlines have to do with rising copper prices. Naturally, that’s a bullish call for copper stocks. After all, copper is one of the most versatile metals on the market. It runs through our homes as part of both our plumbing and electrical systems. And as the global economy continues to recover from the coronavirus pandemic coupled with the already strong demand from China, top copper stocks could be looking to enjoy a good ride. To have a broad idea of how copper stocks are doing, one can take a look at the Global X Copper Miners ETF (NYSE: COPX). This ETF has given a return of more than 170% over the past year.

Given its versatility and importance for so many industries, the demand for such commodities has been on the rise. Sure, the metal plays a key role in traditional infrastructure. But it is the secular tailwinds that make copper stocks a compelling investment in the stock market. For instance, electric vehicles (EVs) require significant amounts of copper. In fact, the red-hot industry requires four times as much copper as traditional ICE (internal combustion engine) vehicles. Don’t even get me started on the renewable energy sector. That’s because solar and wind farms are also users of copper. 

Even Goldman Sachs (NYSE: GS) sees an enormous upside in copper prices. The investment bank set a 2025 price target of $15,000 per tonne and calls copper the new oil. Sure, that would be excellent news for companies mining for copper. This could also bode well for top copper stocks. Assuming Goldman is right, could now be a good time to bet on these copper stocks right now?

Top Copper Stocks To Watch Right Now

BHP Group

BHP Group is one of the largest diversified natural resources companies in the world. The company owns a diverse portfolio of world-class and low-cost operations across the globe. While it has exposure to a wide range of commodities, the key revenue drivers for the company are iron ore and copper. The surge in iron ore and copper markets is a boon for major companies like BHP. The company has generated huge amounts of cash from the run-up in prices since the depths of the COVID-19 crisis. 

Source: TD Ameritrade TOS

Last month, the company conducted its first marine biofuel trial in Singapore. The key objectives of this trial include understanding the behavior of the fuel, assessing engine and vessel operational performance, as well as exploring the merits and challenges of biofuels as a marine fuel. This will enable the company to build its strategy in this area, potentially leading to bigger things to come.

According to BHP’s Vice President of Maritime, Rashpal Bhatti, the company is striving hard to influence emissions reductions and fully support moves to decarbonize the maritime industry. That aside, if you believe the price of iron ore could continue to hold up and believe Goldman’s copper price prediction, would you include BHP stock on your watchlist today?

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Freeport-McMoRan

Next up, one of the most direct ways to play a rising copper price is to invest in Freeport-McMoran stock. For those unfamiliar, the company is the third-largest copper producer in the world. According to the company’s annual report, 80% of the company’s 2020 revenue came from copper. But an investment in FCX stock is not without concerns. Over time, FCX stock actually has been a relatively poor investment. Assuming you have invested in FCX stock ten years ago, your position will still be in the red.

Source: TD Ameritrade TOS

The company’s stock price is only showing signs of life after the stock market crash in 2020. Since then, the company’s stock price has been climbing steadily to date. With the U.S. government looking more closely at initiatives to increase investments in the renewable energy and electric vehicle space, Freeport-McMoRan is well-positioned to benefit as one of the largest copper producers in the world. What’s more, the company recently reported first-quarter results, in which revenue rose 73% year-over-year to reach $4.85 billion. If prices stay favorable in the copper market, FCX stocks are poised to climb further.

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Southern Copper

Investors who love solar energy stocks should also pay attention to copper miner Southern Copper. That’s because more electricity generation from wind and solar power simply means higher demand for copper for use in the transmission, distribution, and storage of electricity. In brief, the company explores, mines, smelts, and refines copper primarily.

Source: TD Ameritrade TOS

According to the Copper Development Association, generating electricity from renewable energy “has a copper usage intensity that is typically four to six times higher than it is for fossil fuels“. As copper prices are continuing to grow stronger at the moment, SCOO stock could follow suit. Last week, the company reported a strong first quarter. Net sales rose 47.3% to $2.53 billion, while net income jumped 255.6% to $763.8 million. With such strong financials, will you be adding SCCO stock to your watchlist?

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Glencore

Last on the list, we have Swiss commodities miner Glencore. Investors who have invested in GLNCY stock over the past year will notice their investment has at least doubled in value. The bull case for Glencore has been with its strong free cash flows. Notably, the low production costs have helped the company reap significant profits. Of course, copper prices have helped the company’s stock price shoot higher over the past year. But that’s not all, the company’s strong profits of its copper division were helped by the successful ramp-up of Katanga mines.

Source: TD Ameritrade TOS

If you think that copper production is the company’s only business, then you will need to dig deeper. Many that are new to the company find it hard to believe in the breadth and depth of Glencore’s business. In fact, it is expecting its full-year marketing earnings before interest and taxes to range from $2.2 billion to $3.2 billion, the upper range of its guidance. With a stable balance sheet and strong demand for raw materials, would you be adding GLNCY stock to your May watchlist?

By Jonathan Phillip

Jonathan Phillip is an up and coming financial contributor in the stock market today. He's found a strong niche in writing about true growth industries. His main focus for the last 5 years has been on the cannabis industry and marijuana stocks. He is one of the top contributors to cannabis media outlets like MarijuanaStocks.com. He also is head of social media management for StockMarket.com.

Since an early age, Jonathan has been an active member of the cannabis culture. Coming from Miami, Florida, he's been able to identify emerging trends in the space including the emergence of cannabis derivatives, vapes, e-liquids, wax, and more. His ability to identify emerging niches has afforded him the ability to source valuable information from top industry names.

Jonathan has also managed to build a strong social media presence for companies. He has worked with hundreds of public companies to develop a digital presence. As an active blogger and social media influencer, his focus is on lifestyle segments of the market. You can find Jonathan reporting on anything from industry conferences and investor events to corporate disclosures and cannabis market movers.

Since the early days of marijuana companies going public, Jonathan has made it a point to find information before the crowd. The main target of his writing is on undiscovered or under-researched companies that could hold true, lasting market potential. Through his research, Jonathan has managed to be one of the early writers to identify the opportunity of cannabis over other things like alcohol and he was one of the first reporters to cover the multi-billion dollar deals that materialized in 2017 and 2018. He has also covered the emergence of multi-state operators in the U.S. after Canada paved the way in late 2018 and 2019 for legalization in North America.

Jonathan is also an active member of the underground hip-hop scene. He has worked with some of the biggest names in the rap community while also gaining valuable insight from top producers and business moguls focused on moving brands forward. In his free time, Jonathan builds social communities and continues to hone his skills as a leading financial writer.

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