Copper Mountain Mining (CMMC-T) top pick from Jason Mann on BNN.ca Market Call Friday Nov 26th @ 1200ET
We like copper in general as one of the commodities that should do well during periods of inflation, and as a key metal for the electrification of infrastructure that comes with the move to clean energy. Copper is another commodity that is undersupplied relative to demand, and it’s not easy or fast to bring on new mines.
Copper Mountain is a Canadian producer with flagship mine in B.C., produces ~ 100mm pounds of copper equivalent per year. Also has development projects in Australia, both politically stable markets unlike miners in more exotic locations.
Copper miners have sold off from their April highs as the metal price has gone sideways, but valuation is compelling at these prices. CMMC is in the top 1 per cent of stocks we follow in terms of value, trades at 3.4x Free-cashflow, 3.6x EV/EBITDA, 7.5x PE, with high return on equity of 36 per cent. Balance sheet it solid.
Also has strong price momentum over the past year which is what we look for, particularly when coupled with good valuation.
Like all mining stocks, they are cyclical businesses that rely on a healthy underlying commodity market, we believe that this “transitory for longer” environment makes that the more likely scenario. |
