In this article, we will look at the top 10 zinc stocks picked by hedge funds for 2022. If you want to skip reading about why zinc prices are on the rise, you can go to Top 5 Zinc Stocks Picked By Hedge Funds for 2022.
Zinc has a variety of uses that range from its ability to galvanize other metals in industrial applications, to being a key component in pharmaceutical products, electrical equipment, textiles, and even consumer staples. Zinc prices are soaring in 2022, which is also causing prices of other goods to surge. The Russian invasion of Ukraine has resulted in commodity prices surging, skyrocketing inflation, and an extremely volatile market for commodities.
Zinc Prices Rose In 2021
However, zinc has been on an upwards trend since well before the Ukraine conflict, with Knoema putting forth data that details price drivers for the metal. According to Knoema, zinc prices grew 50% year-over-year in May 2021, with the metal trading at $2,965 per metric ton at the time compared to $1,975 in May 2020. Knoema cited the primary price drivers for soaring zinc prices in 2021 to be a disruption of zinc supplies due to operations being halted at large zinc mines during the COVID-19 pandemic, environmental restrictions in China, along with mine closures in other countries. China is the world’s largest zinc producer, having produced an estimated 4.2 million metric tons in 2021.
Zinc Prices Soar
Last October, The World Bank published its commodity forecast report in which it estimated that zinc prices will fall to an average spot price of $2,400 per metric ton in 2022, down from $2,700 at the end of 2021, hitting an inflection point and then rising steadily. Of course, this was before the major supply chain shock that would be triggered by Russia’s declaration of war on Ukraine. Nickel prices soared enough to cause the London Metal Exchange to halt trading, and zinc and lead prices shot up to decade-long record highs. This March, zinc prices spiked, attaining a record high of $4,896 per ton, while lead rose to a 10-year high of $2,700 per ton.
With the current geopolitical situation driving commodities prices, and zinc prices sitting well-above forecasted levels, zinc stocks are being eyed by elite hedge funds and retail investors who are trying to maximize their returns amidst supply chain woes and a dreary geopolitical situation. We have compiled the top 10 zinc stocks picked by hedge funds for 2022 which include Teck Resources Ltd (NYSE:TECK), Vale S.A. (NYSE:VALE), and Wheaton Precious Metals Corp. (NYSE:WPM), among others.
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Our Methodology
To determine the top 10 zinc stocks picked by hedge funds for 2022 we looked for zinc stocks that are gaining momentum and experiencing high-trading volumes. We made use of Insider Monkey’s database, which tracks over 900 elite hedge funds as of the fourth quarter of 2021 to derive the hedge fund sentiment for each stock. We also gave weight to the analyst sentiment around each stock and mentioned it along with the investor sentiment. We have ranked these stocks by the number of hedge fund holders, and have also mentioned the most prominent shareholders.
Now that we have some context, let’s look at the top 10 zinc stocks picked by hedge funds for 2022.
Top 10 Zinc Stocks Picked By Hedge Funds for 2022
10. Orla Mining Ltd. (NYSE:ORLA)
Number of Hedge Fund Holders: 3
Orla Mining Ltd. (NYSE:ORLA) acquires, explores for, and develops mineral properties. The company explores gold, silver, zinc, lead, and copper deposits. Orla Mining Ltd. (NYSE:ORLA) boasts a 100% interest in the mineral-rich Camino Rojo project, and also the Cerro Quema project located in the Azuero Peninsula in Panama.
This April, Scotiabank analyst Ovais Habib raised his price target on Orla Mining Ltd. (NYSE:ORLA) to CAD7 ($5.51) from CAD6.75 ($5.31) and reiterated an ‘Outperform’ rating on the shares. Investors and analysts are equally bullish on Orla Mining Ltd. (NYSE:ORLA), seeing it as an undervalued high-momentum zinc stock with upside potential. As of April 23, Orla Mining Ltd. (NYSE:ORLA) has returned 26.13% over the past six months.
Hedge funds are upping their stakes in Orla Mining Ltd. (NYSE:ORLA). By the end of the fourth quarter of 2021, Orla Mining Ltd. (NYSE:ORLA) was found in three hedge funds’ portfolios. The combined stakes of these hedge funds came to $800,000. In the preceding quarter, three funds held ORLA stakes worth $709,000. The hedge fund sentiment for the stock is positive, making it rank among the top zinc stocks being picked by hedge funds in 2022.
As of December 31, 2021, First Eagle Investment Management was one of the most prominent shareholders in the company, owning over 5.8 million shares of the stock. Vale S.A. (NYSE:VALE), Wheaton Precious Metals Corp. (NYSE:WPM), and Trilogy Metals Inc. (NYSE:TMQ) are some of the other zinc stocks that are being picked by hedge funds in 2022.
9. Trilogy Metals Inc. (NYSE:TMQ)
Number of Hedge Fund Holders: 8
Trilogy Metals Inc. (NYSE:TMQ) operates as a base metals exploration company in the United States. The company is dedicated to the exploration and development of minerals and is working on the Upper Kobuk Mineral Projects in Alaska’s Ambler Mining District, which contains an estimated 3.4 billion pounds of copper, 3.36 billion pounds of zinc, 0.73 million ounces of gold, and 55 million ounces of silver.
Top money managers were initiating long positions in Trilogy Metals Inc. (NYSE:TMQ) heading into 2022, which is why it is ranked among the top zinc stocks being picked by hedge funds in 2022. Insider Monkey found that by the end of the fourth quarter of 2021, eight hedge funds held long positions in Trilogy Metals Inc. (NYSE:TMQ), with their stakes worth $50.9 million. That’s compared to seven funds long TMQ in the preceding quarter with stakes valued at $58 million.
8. Silvercorp Metals Inc. (NYSE:SVM)
Number of Hedge Fund Holders: 9
Silvercorp Metals Inc. (NYSE:SVM) engages in the acquisition, exploration, development, and mining of mineral properties in China and Mexico. The company primarily explores silver, gold, lead, and zinc metals. Its flagship property is the Ying silver-lead-zinc project located in the Ying Mining District in China.
On February 8, Silvercorp Metals Inc. (NYSE:SVM) announced its results for its fiscal third quarter of 2022, reporting EPS of $0.02. The company’s quarterly revenue came to $59.08 million, up 10.85% year-over-year and outperforming the market consensus by $0.61 million. In February, Silvercorp Metals Inc. (NYSE:SVM) announced that for its fiscal year 2023, the company expects to mine and process ores in the range of 1.04 million to 1.14 million tons, yielding 6,300 to 7,900 ounces of gold, 7.0 million to 7.3 million ounces of silver, 68.4 million to 71.3 million pounds of lead, and 32.0 million to 34.5 million pounds of zinc.
Silvercorp Metals Inc. (NYSE:SVM) has positive investor sentiment and is a top zinc stock being picked by hedge funds in 2022. Silvercorp Metals Inc. (NYSE:SVM) was a part of nine hedge funds’ portfolios at the close of Q4 2021. The total stakes of these funds came to $35.94 million, up from $28.18 million in the third quarter of 2021. Renaissance Technologies upped its Q3 stake in Silvercorp Metals Inc. (NYSE:SVM) by 4%, with the value of its holding rising to $17.79 million by the close of Q4.
7. Eldorado Gold Corporation (NYSE:EGO)
Number of Hedge Fund Holders: 16
Eldorado Gold Corporation (NYSE:EGO) engages in the mining, exploration, and development of mineral products primarily in Turkey, Canada, Greece, and Romania. The company produces gold, silver, lead, and zinc. Eldorado Gold Corporation (NYSE:EGO) owns 100% interest in the Kisladag and Efemcukuru gold mines located in western Turkey, as well as the Lamaque gold mines located in Canada, and the Olympias, Stratoni, Skouries, Perama Hill, and Sapes gold mines located in Greece. Moreover, it owns an 80.5% interest in the Certej development projects located in Romania.
On February 24, Eldorado Gold Corporation (NYSE:EGO) reported its financial results for the fiscal fourth quarter of 2021, in which it beat EPS estimates by $0.02 and revenue estimates by $6.78 million. The company registered EPS of $0.14 and generated revenue of $244.60 million during the quarter. Moreover, National Bank analyst Mike Parkin raised his price target on Eldorado Gold Corporation (NYSE:EGO) to CAD20 ($15.73) from CAD18 ($14.16) earlier this month, while maintaining an ‘Outperform’ rating on the shares, which have gained 12.60% over the past six months.
Eldorado Gold Corporation (NYSE:EGO) is rising in popularity among hedge funds, being spotted in 16 hedge funds’ portfolios at the close of 2021. The total stakes of these hedge funds exceeded $125 million, up from $94.3 million in the third quarter of 2021. As of December 31, Renaissance Technologies is a leading shareholder in Eldorado Gold Corporation (NYSE:EGO) with a stake worth more than $45.78 million.
6. Valmont Industries, Inc. (NYSE:VMI)
Number of Hedge Fund Holders: 17
Valmont Industries, Inc. (NYSE:VMI) produces and sells fabricated metal products in the United States, Australia, Brazil, Denmark, and other international markets. The stock is exhibiting good momentum, having appreciated by 13.46% over the past six months and ranks among the top zinc stocks being picked by hedge funds in 2022.
This month, the company announced market-beating results for its fiscal first quarter of 2022. The company reported earnings per share of $3.07, beating analyst estimates by $0.63, while its quarterly revenue of $980.82 million, up 26.58% year-over-year, outperformed the market consensus by $92.75 million. Shortly after, DA Davidson analyst Brent Thielman raised his price target on Valmont Industries, Inc. (NYSE:VMI) to $260 from $235 and maintained a ‘Neutral’ rating on the shares in light of the company’s fiscal Q1 earnings beats. The analyst commented that the company is well-positioned to increase margins in 2022 and displays upside potential.
On February 22, Valmont Industries, Inc. (NYSE:VMI) increased its quarterly cash dividend to $0.55 per share of common stock, up 10% from the prior dividend of $0.50 per share, or a rate of $2.20 per share on an annualized basis. The latest quarterly dividend was payable on April 15 to investors of record on March 25.
According to Insider Monkey’s data, 17 hedge funds held stakes in the company valued at $455.12 million at the end of the fourth quarter of 2021, down from 19 funds a quarter earlier, though the value of their collective positions rose from $424.28 million. As of December 31, 2021, Impax Asset Management was a leading shareholder in the company with a position valued at $204.66 million.
Valmont is experiencing high trading volumes in 2022 and is a zinc stock being picked by elite hedge funds. Other compelling zinc stocks hedge funds are pouring heavy investments into are Teck Resources Ltd (NYSE:TECK), Vale S.A. (NYSE:VALE), and Wheaton Precious Metals Corp. (NYSE:WPM).
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Disclose. None. Top 10 Zinc Stocks Picked By Hedge Funds for 2022 is originally published on Insider Monkey.
