In light of coronavirus cases resurging domestically and internationally, five metals and mining stocks with high financial strength and profitability that are trading below the Peter Lynch earnings line include Newmont Corp. (NEM, Financial), ALROSA-Nyurba PJSC (MIC:ALNU, Financial), Boliden AB (OSTO:BOL, Financial), Caledonia Mining Corp. PLC (CMCL, Financial)(TSX:CAL, Financial) and Koza Altin Izletmeleri AS (IST:KOZAL, Financial) according to the All-in-One Screener, one of several Premium GuruFocus features.
Dow tumbles as coronavirus cases surge in the U.S. and Europe
On Wednesday, the Dow Jones Industrial Average closed at 25,447.31, down 708.79 points or approximately 2.7% from Tuesday’s close of 26,156.10, as investors grappled with coronavirus cases spiking in several U.S. states and European countries.
According to CNBC, Chris Rupkey, chief financial economist at MUFG, said that the latest Covid-19 news undermined hopes that the worst of the pandemic “is behind us” and stoked fears that the resurgence of the virus is taking place during the summer instead of during autumn.
Gold prices reach near eight-year high, coronavirus could lead to "age of copper"
As stock prices tumble, spot gold prices climbed to $1,777.53 per Troy ounce, edging near its October 2012 high of $1,779.06 as investors sought safer assets like gold and copper. Henning Gloystein, director of energy, climate and resources at Eurasia Group, said in a research note on Tuesday that green and digital stimulus programs, especially in Europe and Asia, could accelerate copper demand: “electric vehicles, 5G networks and renewable power generation all require large amounts of copper." CNBC added that while he sees copper demand declining during the remainder of this year, Gloystein projects a stimulus-driven rebound in 2021.
As such, investors might find opportunities in stocks engaging in metal production and mining. The Screener identified several companies around the globe with high financial strength and profitability and a price-earnings ratio less than 14. The price-earnings ratio criterion stems from legendary Fidelity Magellan Fund manager Peter Lynch, who created his well-known earnings line at 15 times earnings.
Newmont
Greenwood Village, Colorado-based Newmont explores for and acquires gold and copper properties around the globe. GuruFocus ranks Newmont’s profitability 6 out of 10, driven by margins and returns outperforming over 90% of global competitors yet weighed down by a three-year revenue growth rate that underperforms 56.80% of global metals and mining companies.
Gurus with large holdings in Newmont include First Eagle Investment (Trades, Portfolio) and Jim Simons (Trades, Portfolio)’ Renaissance Technologies.
ALROSA-Nyruba
Alrosa-Nyruba develops deposits for the production and marketing of diamonds and diamond products. GuruFocus ranks the Russian mining company’s financial strength 10 out of 10 on the back of strong Altman Z-scores and no long-term debt.
Alrosa-Nyruba’s profitability ranks 8 out of 10, driven by expanding operating margins and returns that are outperforming over 98% of global competitors despite three-year revenue and earnings growth rates underperforming over 54% of global metals and mining companies.
Boliden
Boliden operates a network of mining areas and smelters in Sweden, Norway, Finland and Ireland. GuruFocus ranks the Swedish mining company’s profitability 8 out of 10 on the heels of expanding operating margins and returns that are outperforming over 92% of global competitors.
Caledonia Mining
Based in South Africa, Caledonia Mining explores for and mines gold primarily in the Blanket Gold Mine area of Zimbabwe. GuruFocus ranks the company’s financial strength 9 out of 10 on the back of strong Altman Z-scores and debt ratios outperforming over 90% of global competitors.
Caledonia’s other positive investing signs, which include a high Piotroski F-score of 7, expanding operating margins and consistent revenue growth, contribute to a GuruFocus profitability rank of 8.
Koza Altin Izletmeleri
Koza Altin Izletmeleri operates a network of gold mines across the Aegean, Marmara and Black Sea regions. GuruFocus ranks the Turkish mining company’s profitability 10 out of 10 on several positive investing signs, which include a four-star business predictability rank, a high Piotroski F-score of 7, expanding operating margins and returns that are outperforming over 97% of global competitors.
See also
GuruFocus provides its services across nine regions: the U.S., the U.K., Asia, Europe, Canada, Oceania, Latin America, Africa and India.
Disclosure: No positions.
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