Top emerging market mining stocks
As the metals price recovery maintains momentum, mining stocks in emerging market (EEM) (VWO) are gaining attention. While the largest 5 emerging market mining stocks can be cited in most metal-focused funds, they are not necessarily trading at attractive valuations currently. We reviewed leading emerging market mining stocks globally to arrive at the following 5 equities:
|Ticker||Company||Country||Commodity||Market Capitalization ($billions) as of April 2017|
|VALE||Vale||Rio de Janeiro, Brazil||Steel Raw Materials||48.31|
|NILSY||Norilsk Nickel||Moscow, Russia||Base Metals||25.3|
|FNLPF||Fresnillo||Mexico City, Mexico||Precious Metals||14.06|
|ZIJMF/ZIJMY||Zijin Mining||Xiamen, China||Precious Metals||10.22|
|600547.SS||Shandong Gold||Jinan, China||Precious Metals||9.64|
Forward valuations look attractive for these stocks
Forward valuations for each of these stocks look favorable as can be seen in the chart below. Expected earnings growth for each is treading upward, indicating higher earnings expectations from the stock. Moreover, the forward price-to-earnings ratios, as indicated by the white lines, are quite low compared to last year. However, these forward valuations appear to be on the verge of gaining momentum, as investors increasingly hunt down these value stocks.
Vale SA (VALE)
Based in Brazil (EWZ), Vale SA (VALE) is the largest producer of iron ore and nickel in the world. Political turbulences often weigh down the stock markets in Brazil. The stock trades on the NYSE under the symbol VALE. At a price of $9.80 a share, the ADR is up 29% YTD (as of August 13), still far below the $13-$16 levels it had seen before the commodity price crash. The trailing 12-month PE ratio for the stock currently stands at 11.24.
PJSC Norilsk Nickel (NILSY)
This Russian (RSX) nickel and palladium mining and smelting company is the world leader in the production of these metals. The company’s stock trades at the NYSE OTC markets under the symbol NILSY. At a price of $15.1 a share, the ADR is down 10.55% YTD (as of August 13). The trailing 12-month PE ratio for the stock currently stands at 9.37.
Fresnillo, Mexico (FNLPF)
Fresnillo, Mexico (EWW) is the world’s leading silver (SLV) producer and one of Mexico’s largest gold (GLD) producers. The stock trades at the NYSE OTC market under the symbol FNLPF. At a price of $20 a share, the ADR is up 35% YTD (as of August 13), still at a distance from its mid-2016 levels highs of over $25. The trailing 12-month PE ratio for the stock currently stands at 35.54.
Zijin Mining Group Company Limited known Zijin is a leading Chinese gold, copper and non-ferrous metals producer and refiner in Mainland China (FXI). The company’s ADR trade on the NYSE OTC market under the symbols ZIJMF and ZIJMY. At a price of $0.37 a share, the ADR is up 20% YTD (as of August 13), gradually approaching its pre-commodity crash high of $0.44. The trailing 12-month PE ratio for the stock currently stands at 19.62.
Shandong Gold Mining (600547.SS)
Shandong Gold Mining Co. is a state-owned Chinese gold mining company. The company does not have a listed ADR on the US exchanges. Its stock currently trades on the Shanghai Stock Exchange under the ticker 600547. At a price of 33.9 yuan ($5.07) per share, the ADR is down 7% YTD (as of August 13), still far below the 46-48 yuan ($6.88-$7.18)/share levels it has seen during the second half of last year.