In this article, we discuss 10 best copper stocks to buy for 2023. If you want to see more stocks in this selection, check out 5 Best Copper Stocks To Buy for 2023.
Jonathan Barratt, the CEO of CelsiusPro, suggests that investors should purchase copper during a downturn when there is a chance to do so. Referring to a shortage of resources and a significant requirement for copper in the renewable energy sector, Barratt told CNBC on March 2:
“Our outlook for 2023 and 2024 is: when you get a dip in copper prices, it’s something to have in your portfolio. There is just not enough supply. And when we look at everything that’s happening in the environmental space, the renewables, everything, copper is a key component. So that’s a buy on dip at any chance you get.”
Moody’s Investors Service has revised its worldwide outlook for Metals & Mining from negative to stable due to a slight improvement in business conditions in the US and Europe. Additionally, China’s reopening of the economy has boosted demand for base metals, steel, and coal, further supporting this shift in outlook. Moody’s stated that there are indications of an increase in demand for base metals, and their prices are being supported by limited inventories. The price of aluminum is expected to remain above the average historical level until early 2024 due to various factors, including its growing role in clean energy. Copper’s prices will be supported by historically low inventories and ongoing industry supply disruptions. While nickel is expected to have a surplus in 2023, the electric vehicle market’s gradual growth in demand will result in supply deficits. Finally, zinc prices will be supported by limited supply, low inventories, and high energy costs, which will push out high-cost producers.
The copper industry is trying to become greener. The largest copper producers in the world have announced their plan to reduce both direct and indirect greenhouse gas emissions to zero by 2050. This initiative is aimed at attracting investment funds that prioritize environmental concerns. The International Copper Association (ICA) has projected a doubling of copper demand from 2020 levels to 50 million tonnes by 2050. Thus, it has set targets for its members to decrease their direct and indirect emissions by 30% to 40% by 2030, 70% to 80% by 2040, and ultimately reaching zero by 2050. The process of producing copper from scrap metal usually involves the use of electricity, making it a more straightforward process to reduce carbon emissions.
On March 16, the European Union introduced legislation aimed at increasing the supply of metals critical to the energy transition, including copper and nickel, by categorizing them as critical raw materials. This move highlights the increasing political concerns regarding the long-term availability of these metals, as the rising demand for them due to global decarbonization efforts continues.
Copper, which is one of the largest markets for industrial metals, was not included in the European Union’s previous list of critical raw materials released in 2020. Due to its varied uses in manufacturing, construction, and industrial operations, it is widely considered a barometer of global economic activity. However, concerns are rising about potential deep shortages in the future due to its surging usage in electric vehicles and renewable energy. According to the CEO of Glencore Plc, Gary Nagle, copper production will need to nearly triple by 2040 to meet the targets for net-zero carbon emissions. This increase in demand is expected to cause a 15% surge in copper prices, pushing them above $10,000 per ton, where they will likely remain.
To benefit from the boom in the copper industry, some of the best copper stocks to buy this year include Freeport-McMoRan Inc. (NYSE:FCX), Rio Tinto Group (NYSE:RIO), and Newmont Corporation (NYSE:NEM).
Our Methodology
For this article, we selected copper stocks based on overall hedge fund sentiment. We have assessed the hedge fund sentiment from Insider Monkey’s database of 943 elite hedge funds tracked as of the end of the fourth quarter of 2022. The list is arranged in ascending order of the number of hedge fund holders in each firm.
Photo by Ricardo Gomez Angel on Unsplash
Best Copper Stocks To Buy For 2023
10. Taseko Mines Limited (NYSE:TGB)
Number of Hedge Fund Holders: 6
Taseko Mines Limited (NYSE:TGB) is a mining company that procures, advances, and maintains mineral properties, mainly searching for deposits of copper, molybdenum, gold, niobium, and silver. Taseko Mines Limited (NYSE:TGB) was founded in 1966 and is headquartered in Vancouver, Canada. On February 24, the company reported a Q4 GAAP EPS of C$0.02 and a revenue of C$100.62 million, and Taseko Mines Limited (NYSE:TGB) produced 26.7 million pounds of copper during the fourth quarter.
On February 27, TD Securities raised the firm’s price target on Taseko Mines Limited (NYSE:TGB) to C$2.75 from C$2.50 and kept a Buy rating on the shares.
According to Insider Monkey’s fourth quarter database, 6 hedge funds were bullish on Taseko Mines Limited (NYSE:TGB), compared to 4 funds in the prior quarter. Ric Dillon’s Diamond Hill Capital is the biggest stakeholder of the company, with 7.17 million shares worth $10.5 million.
Like Freeport-McMoRan Inc. (NYSE:FCX), Rio Tinto Group (NYSE:RIO), and Newmont Corporation (NYSE:NEM), Taseko Mines Limited (NYSE:TGB) is one of the best copper stocks to monitor.
Diamond Hill Capital made the following comment about Taseko Mines Limited (NYSE:TGB) in its Q4 2022 investor letter:
“We have held Canada-based copper miner Taseko Mines Limited (NYSE:TGB) for its attractive positioning as one of the only small copper miners operating in the US. The combination of low inventories relative to historical levels and still-low copper prices allows Taseko to capitalize on rising copper prices —as they did in Q4. The public comment period for Taseko’s second active mine in Florence, Arizona, also ended successfully in October, and the business capped off the year by announcing an attractive development partnership for Florence, bringing clarity for investors.”
9. Ero Copper Corp. (NYSE:ERO)
Number of Hedge Fund Holders: 8
Ero Copper Corp. (NYSE:ERO) explores, develops, and operates mining projects in Brazil. Its primary focus is on the production and sale of copper concentrate extracted from the Caraíba operations situated in northeastern Bahia state, which also yields gold and silver by-products. Ero Copper Corp. (NYSE:ERO) was established in 2016 and has its headquarters in Vancouver, Canada.
On January 18, Ero Copper Corp. (NYSE:ERO) announced that it achieved its highest-ever copper and gold production for the entire year in 2022. The company’s operations in Brazil, namely the Caraíba operations, yielded 46,371 metric tons of copper in concentrate, surpassing its full-year forecast of 43,000-46,000 tons. Additionally, its operations in Xavantina, Brazil, produced 42,669 ounces of gold, which was above the predicted range of 39,000-42,000 ounces.
Scotiabank raised the firm’s price target on Ero Copper Corp. (NYSE:ERO) to C$30 from C$25 and kept an Outperform rating on the shares on March 14.
According to Insider Monkey’s fourth quarter database, 8 hedge funds were bullish on Ero Copper Corp. (NYSE:ERO), compared to 6 funds in the earlier quarter. Thomas E. Claugus’ GMT Capital is the biggest stakeholder of the company, with 6 million shares worth $83 million.
8. Southern Copper Corporation (NYSE:SCCO)
Number of Hedge Fund Holders: 16
Southern Copper Corporation (NYSE:SCCO) engages in mining, exploring, smelting, and refining copper and other minerals in Peru, Mexico, Argentina, Ecuador, and Chile. On February 3, the company reported that Q4 production climbed slightly from Q3 and its mines were running at full capacity despite protests in Peru that forced other companies to halt operations. Southern Copper Corporation (NYSE:SCCO) is one of the best copper stocks to invest in.
Matthew Murphy, an analyst at Barclays, increased the price target on Southern Copper Corporation (NYSE:SCCO) from $55 to $56 and maintained an Equal Weight rating on the stock. According to the analyst, gold is a preferable hedge against potential decline in the economic outlook, despite better-than-expected economic growth. Murphy also noted that he continues to favor gold over copper equities.
According to Insider Monkey’s fourth quarter database, 16 hedge funds were long Southern Copper Corporation (NYSE:SCCO), compared to 19 funds in the prior quarter. Ken Griffin’s Citadel Investment Group is a prominent stakeholder of the company, with 326,929 shares worth approximately $20 million.
7. Hudbay Minerals Inc. (NYSE:HBM)
Number of Hedge Fund Holders: 21
Hudbay Minerals Inc. (NYSE:HBM) is a mining company with a diverse range of operations that concentrates on exploring, developing, operating, and enhancing properties across North and South America. Its production includes copper concentrates containing gold and silver, zinc metals, and molybdenum concentrates. The company, founded in 1927, is headquartered in Toronto, Canada. Hudbay Minerals Inc. (NYSE:HBM) reported that consolidated copper production in the fourth quarter of 2022 was 29,305 tonnes, an increase of 20% compared to the third quarter of 2022, primarily due to higher copper grades in Peru. It is one of the best copper stocks to buy for 2023.
On March 14, Scotiabank analyst Orest Wowkodaw raised the firm’s price target on Hudbay Minerals Inc. (NYSE:HBM) to C$10 from C$9 and reiterated an Outperform rating on the shares.
According to Insider Monkey’s fourth quarter database, 21 hedge funds were long Hudbay Minerals Inc. (NYSE:HBM), compared to 14 funds in the earlier quarter. Robert Richards’ Heathbridge Capital Management is a significant position holder in the company, with 2 million shares worth $10.35 million.
6. BHP Group Limited (NYSE:BHP)
Number of Hedge Fund Holders: 28
BHP Group Limited (NYSE:BHP) is a resources company that operates in Australia, Europe, China, Japan, India, South Korea, North America, and South America, among other international locations. The company is involved in the mining of several minerals such as copper, silver, zinc, molybdenum, uranium, gold, iron ore, metallurgical, and energy coal. On March 8, BHP Group Limited (NYSE:BHP) stated its dedication to expanding its collection of copper and nickel projects. However, the company has no intention of participating in the lithium market, as it believes that there is already an adequate supply of the resource.
On March 13, JPMorgan raised the firm’s price target on BHP Group Limited (NYSE:BHP) to 2,550 GBp from 2,510 GBp and kept a Neutral rating on the shares.
According to Insider Monkey’s fourth quarter database, 28 hedge funds were bullish on BHP Group Limited (NYSE:BHP), compared to 20 funds in the prior quarter. John Overdeck and David Siegel’s Two Sigma Advisors is the largest stakeholder of the company, with 757,100 shares worth $47 million.
In addition to Freeport-McMoRan Inc. (NYSE:FCX), Rio Tinto Group (NYSE:RIO), and Newmont Corporation (NYSE:NEM), BHP Group Limited (NYSE:BHP) is one of the best copper stocks to invest in.
In its Q1 2021 investor letter, Harding Loevner, an asset management firm, highlighted a few stocks and BHP Group Ltd. (NYSE:BHP) was one of them. Here is what the fund said:
“Our purchase of Australian mining company BHP Group Ltd. (NYSE:BHP) is an example of a quality company at a moderate valuation that should deliver attractive long-term returns. We believe the market has undervalued its enduring competitive advantage due to its low cost iron and copper mining operations which has allowed the company to deliver consistent profits and cash flows across the inevitable ups and downs of the global metals cycle. While the variability of commodity prices prevents BHP from scoring in the top ranks of measured quality, we are willing to bear some of that uncertainty in return for a more attractive valuation given the company’s strong business fundamentals.”
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Disclosure: None. 10 Best Copper Stocks To Buy For 2023 is originally published on Insider Monkey.
