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In 2018, copper producers were among the worst stocks in the market. The ongoing trade war between the United States and China was just one of several macroeconomic factors that weighed on prices.
But we like to be greedy when Wall Street is fearful. Because often, the worst-performing asset class from one year is the best-performing asset class the following year.
And VQScore just alerted us to three copper stocks to buy now that recently hit our "buy zone" and we're excited to share with you today...
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Copper prices are up 12% year to date, and we think this is just the start of massive bull run for the industrial metal.
Thanks to a weaker U.S. dollar, Chinese proposals for tax cuts and infrastructure spending, and progress on a trade deal, the price of copper should rise at least 60% in 2019.
And the outlook in the coming years looks even better...
You see, just this week, macroeconomic research firm Capital Economics projected that copper prices would peak at $10,000 per metric ton by 2025. That figure represents a 60% surge from current levels.
The firm expects those supply constraints coupled with surging demand will press prices three times higher than the global consensus forecast. They also project that once prices hit that five-figure level, mines will realize new incentives to expand production. And as prices rise to record levels, investors should capitalize on the supply and demand imbalance.
As copper prices climb, shares of these stocks could easily double or triple in value.
Here are the three best stocks to buy now, before copper prices soar in 2019...
Best Stocks to Buy Now, No. 3
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Southern Copper Corp. (NYSE: SCCO) is one of the world's largest integrated copper producers. The company also produces, smelts, and refines coal, silver, molybdenum, zinc, and lead at its facilities in Mexico and Chile.
But one of the best things about Southern is its rock-solid balance sheet and ability to return cash to investors.
Southern Copper pays a healthy dividend of 4.11% and is financially strong, according to its F-score of 8 (out of 9). This complements its Altman Z-score of 4.02, which signals that it faces no threat of bankruptcy or negative credit event.
These metrics tell us that the firm can weather the ongoing downturn in prices. And now - with a VQScore of 4.75 - Southern Copper looks to be a breakout candidate in 2019 and beyond.
Best Stocks to Buy Now, No. 2
The global trade spat between the United States and China has weighed mightily on Freeport-McMoRan Inc. (NYSE: FCX). Shares of the massive molybdenum, gold, and copper producer have fallen as much as 51.3% over the last 52 weeks.
Recent negotiations between the world's two largest economies have produced some optimism, but we're still well off from last year's high of $19.60 per share.
Freeport has an F-score of 8, a sign that the firm is still financially strong despite weakness in copper prices. The company pays a 1.62% dividend and is trading at a cheap price/earnings ratio of 6.95.
Right now, Wall Street has a consensus 12-month outlook of $15.50 per share. That figure represents a 25.4% upside from Monday's closing price.
But with a VQScore of 4.75 - in the Buy Zone - we anticipate that the stock will run toward $25 per share, in line with last month's forecast from investment bank Jefferies.
The investment bank expects a strong recovery for the firm's EBITDA and free cash flow. A breakout to $25 represents 102% upside.
Best Stocks to Buy Now, No. 1
Turquoise Hill Resources Ltd.'s (NYSE: TRQ) stock has pulled back by more than 50% over the last year, making now a terrific buying opportunity for the first time in a long time.
Sluggish copper prices, a trade standoff, and global growth concerns pressed TRQ lower - all the way into our Buy Zone.
Concerns about the company's debt have allowed the stock to trade down at 0.36 times price to tangible book value. The company owns two-thirds of the Oyu Tolgoi, a massive copper/silver/gold mine located in Mongolia.
This mine holds one of the largest high-grade copper deposits known on earth. That said, massive copper discoveries aren't common in the center of Asia, and China is poised to become the primary customer when this mine if fully operational. Higher copper prices will offer greater incentive and help obtain additional investment capital if required in the future.
TRQ has a perfect 4.75 VQScore and offers the most upside.
Our one-year target for the stock is $4. That figure would be a mouth-watering 141% return from current levels.
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