In this article, we discuss 5 commodity stocks that analysts are recommending. If you want to see our analysis of the commodities market and some more stocks in this selection, click Analysts Are Recommending These 10 Commodity Stocks.
5. Steel Dynamics, Inc. (NASDAQ:STLD)
Number of Hedge Fund Holders: 29
Steel Dynamics, Inc. (NASDAQ:STLD) was incorporated in 1993 and is headquartered in Fort Wayne, Indiana. The company is involved in steel production, metals recycling, and steel fabrication. On January 24, the company posted earnings per share of $5.78 and a $5.31 billion revenue for the fourth quarter of 2021, both above Street estimates.
On March 16, Steel Dynamics, Inc. (NASDAQ:STLD) announced Q1 adjusted earnings guidance of $5.85 to $5.89 per share, above the Q1 $5.05 market consensus estimate. Steel Dynamics, Inc. (NASDAQ:STLD) on February 28 declared a $0.34 per share quarterly dividend, a 30.8% increase from its prior dividend of $0.26. The dividend will be paid on April 15, to shareholders of record on March 31.
Steel Dynamics, Inc. (NASDAQ:STLD)’s board of directors also authorized an additional share repurchase program of $1.25 billion on February 28. The authorization came into effect immediately and is an addition to the prior $1.0 billion program announced on July 6, 2021, with $92 million still available for repurchase on February 25, 2022.
Goldman Sachs analyst Emily Chieng on February 15 reiterated a Buy rating on Steel Dynamics, Inc. (NASDAQ:STLD), and raised the price target on the shares to $80 from $75 as part of a broader research note on Metals & Mining. The analyst told investors that her updated model for the sector is based on commodity price assumptions, while also making allowances for shipments and relevant costs.
Among the hedge funds tracked by Insider Monkey, 29 funds were bullish on Steel Dynamics, Inc. (NASDAQ:STLD) at the end of the fourth quarter of 2021, up from 23 funds in the prior quarter. D E Shaw is the largest shareholder of the company, with 1.2 million shares worth $75.5 million.
4. Alpha Metallurgical Resources, Inc. (NYSE:AMR)
Number of Hedge Fund Holders: 30
Headquartered in Bristol, Tennessee, Alpha Metallurgical Resources, Inc. (NYSE:AMR) is a thermal coal mining company with primary operational sites located in Virginia and West Virginia.
Alpha Metallurgical Resources, Inc. (NYSE:AMR) published solid Q4 results on March 7, posting earnings per share of $13.45, above market estimates by $2.01. Revenue for the period came in at $828.22 million, outperforming analysts’ predictions by $102.47 million.
On March 10, B. Riley analyst Lucas Pipes upgraded Alpha Metallurgical Resources, Inc. (NYSE:AMR) to Buy from Neutral with a price target of $155, up from $143, implying 28% upside. The analyst noted Alpha Metallurgical Resources, Inc. (NYSE:AMR)’s impressive operational execution over the past several months and believes the company is set up for a “significantly improved” 2022. The Russia/Ukraine crisis has allowed pricing upside and Alpha Metallurgical Resources, Inc. (NYSE:AMR) expects to have ample exposure to the record high met coal markets, the analyst told investors in a bullish case for the stock.
Alta Fundamental Advisers is the largest stakeholder of Alpha Metallurgical Resources, Inc. (NYSE:AMR), with more than 1 million shares worth approximately $64 million. Overall, 30 hedge funds were long Alpha Metallurgical Resources, Inc. (NYSE:AMR) in Q4 2021.
3. Teck Resources Limited (NYSE:TECK)
Number of Hedge Fund Holders: 40
Teck Resources Limited (NYSE:TECK) is a Canadian producer of steelmaking coal, copper, gold, silver, zinc and zinc concentrates, chemicals, fertilizers, and other metals. The company owns exploration and development interests in properties across Australia, Chile, Ireland, Mexico, Peru, Turkey, and the United States.
On March 17, Stifel analyst Alex Terentiew kept a Buy rating on the shares and lifted the price target on Teck Resources Limited (NYSE:TECK) to C$68 from C$57.
On February 24, Teck Resources Limited (NYSE:TECK) declared a C$0.125 per share quarterly dividend, a 150% increase from its prior dividend of C$0.05. The dividend will be distributed on March 31, to shareholders of record on March 15. The company also announced a supplemental dividend of C$0.50 per share, payable with the quarterly dividend.
Teck Resources Limited (NYSE:TECK) disclosed plans to repurchase up to $100 million of Class B subordinate voting shares annually on February 24. The current program authorizes the purchase of up to 40 million shares through the period ending November 1, 2022.
In Q4 2021, 40 hedge funds held long positions in Teck Resources Limited (NYSE:TECK), compared to 41 funds in the earlier quarter. Soroban Capital Partners owned the largest stake in the company, with more than 11 million shares worth $318.5 million.
2. Alcoa Corporation (NYSE:AA)
Number of Hedge Fund Holders: 41
Alcoa Corporation (NYSE:AA) sells bauxite, alumina, and aluminum products across markets in the United States, Spain, Australia, Iceland, Norway, Brazil, and Canada. The company was founded in 1888 and is headquartered in Pittsburgh, Pennsylvania.
Citi analyst Alexander Hacking, who has a “structurally bullish view” on aluminum, kept a Buy rating on the shares and raised the price target on Alcoa Corporation (NYSE:AA) to $84 from $70 on March 17.
Alcoa Corporation (NYSE:AA) declared on February 24 a $0.10 per share quarterly dividend, in line with previous. The dividend is payable on March 24, to shareholders of record on March 8.
In the fourth quarter of 2021, 41 hedge funds held long positions in Alcoa Corporation (NYSE:AA), compared to 44 funds in the last quarter. Fisher Asset Management is the biggest shareholder of the company, with 6.35 million shares worth $378.5 million.
1. The Mosaic Company (NYSE:MOS)
Number of Hedge Fund Holders: 46
The Mosaic Company (NYSE:MOS) is an agriculture and fertilizer company that is headquartered in Tampa, Florida, with operations concentrated in the production of phosphate and potash crop nutrients.
At the end of December 2021, 46 hedge funds were bullish on The Mosaic Company (NYSE:MOS), up from 40 funds in the earlier quarter. Soroban Capital Partners is a leading shareholder of the company, with 4.3 million shares worth $172.70 million.
The Mosaic Company (NYSE:MOS) on December 17 declared a $0.1125 per share quarterly dividend, a 50% increase from its prior dividend of $0.0750. The dividend was distributed to shareholders on March 17.
Goldman Sachs analyst Adam Samuelson on March 15 upgraded The Mosaic Company (NYSE:MOS) to Buy from Neutral with an $83 price target. The analyst observed that the Russia/Ukraine conflict has the potential to be one of the most disruptive events across the food and agricultural supply chain in decades. He believes The Mosaic Company (NYSE:MOS) will be a beneficiary in the current environment, given expected “material fertilizer supply shocks” across nutrients, grain, and oilseed markets heading into 2023.
Here is what Ariel Focus Fund has to say about The Mosaic Company (NYSE:MOS) in its Q3 2021 investor letter:
“Our third quarter contributors generally fit this “happy family” description. Mosaic Company is the largest contributor to performance this year as well as our biggest holding as we go to print. The company returned +12.20% in the quarter and +56.16% so far this year. We have long believed Mosaic is well positioned to help the world feed its 7 billion people with a better diet amid finite agricultural resources. The company’s nutrients, particularly phosphates and potash, are key to improving yields on the limited number of global acres devoted to farming. Mosaic believes up to 60% of the yield on many crops is determined by the appropriate application of nutrients. For this reason, the company has remained focused on expanding its leadership position in this core fertilizer business. For several years, this concentrated effort did not show results. But in 2021, Mosaic’s focus began to pay off. Strong U.S. crop prices as well as growing transportation costs for imported fertilizer from overseas mines have led to improved earnings expectations. Last December, analysts showed a mean estimate for Mosaic 2021 EPS of $1.43. Today, those same analysts expect the company to earn $4.67! Estimates for 2022 EPS have also increased dramatically from $2.10 as of December 2020 to $4.99 today. We believe Mosaic will also continue to benefit from global inflation.”
You can also take a look at 10 Value Stocks in Warren Buffett’s Latest Portfolio and Bill Gates’ Latest Portfolio: Top 12 Stock Picks.
