In this article, we will look at the 8 Best Copper Stocks To Buy According to Hedge Funds.
Overview of the Copper Supply and Demand
Copper is recognized as a critical metal due to its extensive applications, particularly in electrical wiring and renewable energy infrastructure. Prices of copper reached a record high during the first half of 2024, selling at $5.11 per pound on May 21, 2024. However, the price dropped slightly during the third quarter but remained elevated to its historic rates from the past two years.
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At the start of Q3, copper was priced at $4.42 per pound. It peaked at $4.65 on July 5 but then declined to a low of $3.95 by August 7. The third quarter ended with prices recovering to $4.50 on September 30.
There are several factors affecting the prices of copper. Firstly, the demand for this metal remains high, largely driven by sectors related to the energy transition, including renewable energy and electric vehicles (EVs). However, this demand coincides with a slowdown in the Chinese real estate sector, which is traditionally a major consumer of refined copper. Regardless of the challenges in the real estate market in China, the global demand for copper saw a slight increase of 2.5% in the first half of 2024. The growth was driven by notable demand from China of around 2.7% while other regions also witnessed demand growth of around 2%.
However, despite high consumption, the supply side outpaced the demand. According to a report by the International Copper Study Group (ICSG), there was a surplus of 535,000 metric tons (MT) through the first eight months of 2024. The global copper mine production remained elevated, increasing by 2% to reach 14.86 million MT from January to August 2024. Chile’s Escondida and Collahuasi mines remained key contributors while operations in the Democratic Republic of Congo and Indonesia reported 11% and 22% production growth, respectively. In addition to raw copper refined metal production also witnessed a 5% increase driven by expansion in China and the launching of new facilities in the Democratic Republic of Congo.
According to a report by Investing News Network, analysts believe that the primary reason behind higher prices during the first half of 2024 was not the fundamental supply-demand play, but was led by speculative investment. Analysts back this sentiment on the assumption that market participants would have taken a cautious approach following substantial gains in Q2 resulting in fluctuating prices of copper.
Looking ahead, the ongoing struggles in China’s real estate sector have dampened overall demand for copper. The government’s efforts to stimulate the market through various initiatives to boost housing projects are expected to revive global demand further. Moreover, energy transition efforts also continue to fuel demand for copper, the International Energy Forum estimates that approximately 1.1 new mines will need to come online annually until 2050 just to maintain current demand levels.
Now that we have discussed the market trends in the copper industry, let’s take a look at the 8 best copper stocks to buy according to hedge funds.
An open pit mine, with heavy machinery extracting copper ore in the background.
Our Methodology
To compile the list of the 8 best copper stocks to buy according to hedge funds, we used the Finviz stock screener and our previous articles. Using the two sources we curated an aggregated list of copper stocks sorted by market capitalization. Next, we ranked these companies based on the number of hedge fund holders as of Q3 2024, sourced from Insider Monkey’s database. The list is ranked in ascending order of the number of hedge funds.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
8 Best Copper Stocks To Buy According to Hedge Funds
8. Ero Copper Corp (NYSE:ERO)
Number of Hedge Fund Holders: 14
Ero Copper Corp (NYSE:ERO) is a Canadian company focused on producing copper, with its main operations located in Brazil. Its main asset is a 99.6% stake in Mineracao Caraiba S.A., which operates the Caraiba Operations in Bahia, Brazil. This includes several mining sites like the Pilar and Vermelhos underground mines and the Surubim open pit mine. The company emphasizes its role as a clean copper producer, aiming for low carbon intensity in its operations.
The company has made significant progress in its operations and partnerships recently, particularly with the Furnas Copper-Gold Project. In July, Ero Copper Corp (NYSE:ERO) finalized a definitive earn-in agreement with Vale Base Metals, allowing it to acquire a 60% interest in the Furnas Project, located in Brazil’s Carajas Mineral Province. This agreement aligns with management’s goals and positions the company for substantial growth in copper production.
Moreover, its Tucuma Operation also reached a significant milestone. During the third quarter of fiscal 2024, the Tucuma Operation contributed 839 tonnes of copper to the company’s total consolidated production of 10,759 tonnes. While this is impressive, what’s more encouraging is the prospect of this site. The project is expected to produce a total of 326,000 tonnes of copper over an initial mine life of 12 years.
In addition to the Tucuma Operation, Ero Copper Corp (NYSE:ERO) also reported an 11.9% increase in copper production at its Caraiba operations, producing nearly 9,920 tonnes of copper concentrate. The increase was attributed to better mine grades at its Pilar and Vermelhos mines. CEO David Strang remains confident for the future prospects and projected that 2025 could be their best year yet, as they capitalize on their operational strengths.
7. BHP Group Limited (NYSE:BHP)
Number of Hedge Fund Holders: 22
BHP Group Limited (NYSE:BHP) is a major Australian resources company that specializes in mining and producing various essential commodities. The company operates through three main segments including Copper, Iron Ore, and Coal. The materials extracted by the company are used in key industries including steel for construction, copper for renewable energy technologies, nickel for batteries, and much more. It has a global reach with operations in Australia, the Americas, Europe, and Asia, with significant mining sites such as Olympic Dam and Escondida.
Copper remains one of the key assets of BHP Group Limited (NYSE:BHP). During the fiscal first quarter of 2025, the company produced 476 kilotonnes of copper, which was up 4% year-over-year. Escondida, which is one of the world’s largest copper mines remained one of the key contributors to its copper production, its production was up 11% year-over-year, mainly due to a higher concentration of feed grade and improved recoveries.
While copper production is already growing, management has been busy improving its portfolio further. During the quarter, BHP Group Limited (NYSE:BHP) announced a 50/50 joint venture with Lundin Mining in Argentina to advance a major copper discovery, considered to be one of the most significant in decades. Moreover, in Canada, its Jansen Stage 1 potash project is 58% complete, with the first production expected in two years. Looking ahead, management believes that its commodity demand will increase substantially due to the monetary easing in China to stimulate economic growth. It is one of the best copper stocks to buy according to hedge funds.
6. Southern Copper Corporation (NYSE:SCCO)
Number of Hedge Fund Holders: 25
Southern Copper Corporation (NYSE:SCCO) is a major mining company that primarily focuses on producing copper, along with other valuable metals like molybdenum, silver, and zinc. The company has several mines in Peru and Mexico and also explores new mineral deposits in countries like Argentina, Chile, and Ecuador. In addition to mining, it also uses raw materials through smelting and refining to produce pure metals. This includes turning copper concentrates into refined copper products.
Southern Copper Corporation (NYSE:SCCO) is closely tied to the dynamics of the copper market and currently, the market conditions look favorable. As per the company’s third-quarter results for fiscal 2024, the international copper prices have increased by 10% from $3.79 per pound in Q3 2023 to $4.17 in the last quarter. Due to the changing supply and demand dynamics, management is expecting a slight market surplus of about 100,000 tons of copper for 2024. On the demand side, although China, the largest consumer of copper, remains weak at the moment, management believes that the recently announced economic measures will promote economic growth and fuel demand for copper products.
During the third quarter, copper represented 77% of the company’s total sales. The company grew its copper production by 11% on a quarter-on-quarter basis to reach 252,219 tons. Its Peru production site remains one of the key contributors as it grew production by 18% during the same time, driven by higher mineral throughput at Cuajone and higher ore grades and recoveries at Toquepala. Management expects to produce 7% more copper in 2024 as compared to the previous year by reaching 975,000 tons of copper by the end of the year. It is one of the best copper stocks to buy according to hedge funds.
5. Rio Tinto Group (NYSE:RIO)
Number of Hedge Fund Holders: 30
Rio Tinto Group (NYSE:RIO) is a United Kingdom-based mining and metals company, which operates in more than 35 countries around the world. The company engages in the extraction of copper, iron ore, aluminum, and diamonds. It also processes the raw metals and makes them ready to be used in the development of future technologies, such as electric vehicles and renewable energy storage.
The company is on track to achieve its ambition of growing its overall copper equivalent production by a 3% compound annual growth rate from 2024 to 2028. Rio Tinto Group (NYSE:RIO) has improved its copper and gold position significantly due to the development of the Winu Project. On December 4, management announced its partnership with Sumitomo Metal Mining (SMM) to develop the Winu copper-gold project located in Western Australia’s Great Sandy Desert. The Winu project is expected to contribute significantly to the company’s copper output, which is crucial as global demand for copper continues to rise, particularly in renewable energy technologies and electric vehicles.
During the fiscal third quarter of 2024, the total copper production of the company decreased slightly by 1% year-over-year to reach 168,000 tonnes of copper. The slight decrease was primarily due to a significant 44% production drop at Kennecott. Management attributed the decline to high wall movement along two major faults, limiting access to high-quality ore. However, on the bright side, Escondida saw a 15% increase in production due to higher ore grades being processed, thereby improving recovery. Moreover, Oyu Tolgoi also experienced a 19% increase in copper production, driven by ramping up underground operations and accessing higher-grade ore. It is one of the best copper stocks to buy according to hedge funds.
4. Hudbay Minerals Inc. (NYSE:HBM)
Number of Hedge Fund Holders: 35
Hudbay Minerals Inc. (NYSE:HBM) is a mining company that primarily focuses on copper production. It is one of the best copper stocks to buy according to hedge funds. The company operates several mines that extract copper, with Constancia Mine in Peru, Snow Lake Operations, and Copper Mountain Mine in Canada being the key contributors.
The company is strategically positioning itself for growth through a series of promising projects. For instance, its integration of the Copper Mountain mine is expected to significantly boost financial performance. By 2026, this acquisition is projected to contribute approximately $180 million in annual EBITDA. It also has several long-term projects in development, which advocate for its upcoming potential, such as the Copper World Project and Mason Project.
In addition to its projects, Hudbay Minerals Inc. (NYSE:HBM) maintains a prominent financial position. During the third quarter of fiscal 2024, it produced 31,000 tons of copper and 89,000 ounces of gold. The gold production was particularly noteworthy, exceeding expectations by 52% compared to the previous quarter. This increase was attributed to higher gold grades and improved mill throughput, especially at the New Britannia mill in Manitoba. On the copper front, the management cost-saving measures resulted in a dramatic decrease in cash costs per pound of copper from $1.14 in the second quarter to $0.18 in the recent one.
L1 Long Short Fund stated the following regarding Hudbay Minerals Inc. (NYSE:HBM) in its Q2 2024 investor letter:
“Hudbay Minerals Inc. (NYSE:HBM) (Long +31%) shares rallied over the quarter driven by rising copper and gold prices, as well as strong production results. The company’s first quarter results showed higher gold production and robust operating performance at both its major assets, which exceeded consensus expectations. In addition, the company announced a ~US$400m equity raise to support balance sheet de-leveraging and fund its key growth projects. Hudbay is a mid-tier mining company primarily producing copper, alongside gold and zinc, with its key assets located in Canada and Peru. We are attracted to Hudbay due to our positive medium-term outlook for copper and the company’s strong near-term free cash flow generation. This cash generation potential will allow the company to de-lever and recycle capital back into its highly prospective exploration program and major growth projects, most notably its Copper World project in Arizona.”
3. Barrick Gold Corporation (NYSE:GOLD)
Number of Hedge Fund Holders: 42
Barrick Gold Corporation (NYSE:GOLD) is a major mining company based in Canada that primarily focuses on producing gold and copper. The company operates in 13 countries including copper mines in Chile, Saudi Arabia, and Zambia. In 2023, it produced approximately 4.05 million ounces of gold and 420 million pounds of copper.
The company has faced challenges in 2024 but continues to show progress, particularly concerning its copper operations. During the fiscal third quarter of 2024, Barrick Gold Corporation (NYSE:GOLD) reported a 12% increase in copper production compared to the previous quarter. Management attributed the growth to improved operational efficiencies and cost reductions across its copper mines, particularly at Lumwana in Zambia. Management expects that its cost of producing copper will further decrease as production ramps up throughout the year.
To ramp up its copper production, Barrick Gold Corporation’s (NYSE:GOLD) feasibility studies for Lumwana and Reko Diq are expected to be completed by the end of the year. Lumwana mine is one of the most significant copper assets for the company. Whereas, it is also developing the Reko Diq project in Pakistan, which is one of the largest undeveloped copper-gold projects globally. The project aims to produce high-quality copper and gold concentrate. The expected lifespan of the project is at least 40 years. Management has planned construction in two phases, with initial production targeted for 2028. Considering the current progress and prospects of the company, it ranks as one of the best copper stocks to buy according to hedge funds.
Ariel Focus Fund stated the following regarding Barrick Gold Corporation (NYSE:GOLD) in its first quarter 2024 investor letter:
“Lastly, gold mining company, Barrick Gold Corporation (NYSE:GOLD) fell in the period. Although GOLD delivered in-line earnings results, as higher prices offset lower gold and copper volumes as well as increased costs, investors were disappointed with management’s outlook for full year 2024. GOLD guided to flat production year-over-year driven by lower-than-expected output due to a delayed permit at the Nevada Gold Mines and mechanical issues at Pueblo Viejo. Management remains laser focused on upgrading its mining operations and broadly improving efficiencies amid today’s rising prices for precious metals. The company also continues to prioritize capital returns to shareholders via dividends and a recently announced share repurchase program.”
2. Teck Resources Limited (NYSE:TECK)
Number of Hedge Fund Holders: 68
Teck Resources Limited (NYSE:TECK) is a Canadian company that focuses on mining and producing essential metals, primarily copper and zinc. The company operates several mines across North and South America, including Antamina, Highland Valley Copper, Red Dog Mine, and Carmen de Andacollo.
Management recently transformed its business strategy to concentrate on energy transition metals, which are essential for the shift towards renewable energy and electric vehicles (EVs). This change was marked by the sale of its steelmaking coal business to Glencore for $7.3 billion, completed on July 11, 2024. This divestment allows Teck Resources Limited (NYSE:TECK) to focus primarily on its copper and zinc operations, which are crucial for supporting low-carbon technologies.
In addition, the company has been making significant progress towards its copper growth strategy. During the third quarter of fiscal 2024, Teck Resources Limited (NYSE:TECK) delivered an adjusted EBITDA of $986 million driven by record copper production at its Quebrada Blanca (QB) mine. The mine produced 52,500 tonnes of copper in Q3 2024, which is an increase from 51,300 tonnes in Q2 2024. Moreover, the mill throughput rates also increased, confirming that the plant’s design is robust. Management anticipates reaching the design throughput rates by the end of 2024, which would enhance overall production efficiency. Looking ahead, management has updated its guidance for QB mine copper production to a range of 240,000 to 280,000 tonnes, along with molybdenum production expected between 4.0 to 5.5 thousand tonnes. It is one of the best copper stocks to buy according to hedge funds.
Greenlight Capital stated the following regarding Teck Resources Limited (NYSE:TECK) in its first quarter 2024 investor letter:
“Finally, we established a medium-sized macro position to benefit from higher copper prices. Long-time partners may recall that in 2021 we presented Teck Resources Limited (NYSE:TECK) at the Sohn Investment Conference. At the time, our thesis was based on a combination of being bullish on copper and believing that TECK was about to exit the penalty box after a multi-year investment in a new copper mine that was on the brink of finally coming online. Back then, TECK traded at C$31.09. Based on copper at $4.50 a pound, we thought the stock was undervalued by half. It has since doubled (and dramatically outperformed copper peer Freeport-McMoRan) and, over time, we have reduced the position into strength.
As we showed on this slide from our 2021 presentation, our thesis was that after several new mines, including TECK’s, there would not be new supply available in the second half of this decade.
Time has passed, the new mines have come online and the anticipated gap between supply and demand is likely to open up in the next year. While we still believe TECK is undervalued should copper prices rise, it is less undervalued than it once was. Our thesis now is that copper supply is about to fall short of demand, forcing prices substantially higher. Once again, we think the best way to invest in that thesis is the most direct way – in this case through options on copper futures.”
1. Freeport-McMoRan Inc. (NYSE:FCX)
Number of Hedge Fund Holders: 74
Freeport-McMoRan Inc. (NYSE:FCX) is the best copper stock to buy according to hedge funds. It is a major international mining company based in Phoenix, Arizona. It primarily focuses on extracting and producing copper, gold, and molybdenum, which are essential metals used in various industries. Some of the significant mines owned by the company include Grasberg in Indonesia, which is one of the largest copper and gold deposits globally, Morenci, and Cerro Verde.
Two main factors make Freeport-McMoRan Inc. (NYSE:FCX) an attractive investment opportunity. Firstly, its leaching technology is a critical differentiating factor that enables the company to enhance copper production from low-grade ores and previously unrecoverable materials. During the first nine months of 2024, the incremental copper production from its leach initiative was nearly 70% higher than the comparable period last year. This technology stands out as it allows the company to produce substantial amounts of copper without investing in new mining sites. Management estimates that the technology requires an investment of less than $1 billion, which is considerably less than the multibillion-dollar capital investment that a mining expansion project takes.
Secondly, the company has strategically positioned itself to benefit from secular demand trends for copper driven by electrification. During the third quarter of fiscal 2024, Freeport-McMoRan Inc. (NYSE:FCX) reported robust demand from the United States and China as well despite its weak property sector. As a result, its copper sales for the quarter came in 2% above the guidance taking its adjusted EBITDA to $2.7 billion.
While we acknowledge the potential of Freeport-McMoRan Inc. (NYSE:FCX) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than FCX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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