Mining Stocks

Mining stocks are investments in companies that produce or explore for minerals. Some of these minerals include uranium, coal, molybdenum (which is used in steelmaking), copper, silver and gold. They are affected by fluctuating commodity prices in addition to their own business and operating risks.

While sometimes risky, mining stocks can also be strong performers when commodity prices move up. However, due to the volatility of these stocks, Pat McKeough recommends that they only form a modest part of a well-balanced portfolio.

Canadian penny mining stocks are some of the riskiest stocks you can buy. These companies are trying to find mineral deposits that mine at a profit and such a find are exceedingly rare. Because of this, it’s even more important to look for investment quality in penny mines.

For example, we automatically rule out investing in penny mines that promote themselves too aggressively or do so misleadingly. The mine-finding effort is more likely to succeed if the managers focus on finding a mine rather than hyping their stock.

Junior mining stocks are usually smaller companies that typically take on riskier mining projects. However, if a junior mining stock is successful at finding and mining, it can mean huge returns for investors.

No matter what type of mining stocks, or other stocks you invest in, TSI Network recommends following our three-part Successful Investor strategy:

– Invest mainly in well-established, mostly dividend-paying companies;
– Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; and Utilities);
– Downplay or avoid stocks in the broker/media limelight.

uranium stocks

Uranium stocks offer long-term promise—here’s how to pick the best ones.

Uranium stocks are shares in companies that explore for, mine and refine the metal uranium.

Uranium’s long-term outlook is positive, but supply remains much higher than demand. Low oil prices should also keep prices down in the near term and could slow the construction of new reactors. If you want to invest in uranium stocks, here are the best ways to cut your risk.


Hidden value, explosive profits

Hidden value can produce your biggest gains. It shows up in well-known stocks that are about to unlock the potential of their hidden assets. And in rising growth stocks that the market hasn’t caught up with yet. Pat McKeough shows you the secret in his exclusive report, Canadian Value Stocks: How to Spot Undervalued Stocks.

 

Read this FREE report >>

 


  1. Consider the geographic risks of investing in uranium stocks.

Many emerging countries, such as China, India and Russia, are increasing their nuclear-power use as they switch from power plants that run on coal and oil.

While this looks promising, investing in uranium stocks does entail some unique risks. With any mine, for example, there is a long lead time from exploration and discovery to production. That’s especially so with uranium, which needs extra regulatory approval because of its radioactivity.

Read more on Canadian uranium stocks.

  1. Like any investment, look at the fundamentals of uranium stocks.

We like to see strong fundamentals in the uranium mining stocks we recommend. We look for low debt, because debt can be a problem for any mining company. When we recommend uranium mining stocks, we want to see a positive cash flow, preferably even when uranium prices are low.

Even better, we like to see mining companies that have cash flow from an existing mine that is sufficient for, or at least contributes to, the cost of developing a second mine.

We look for uranium stocks that have an experienced management team. We like to see teams that have a history of mine development and have financed similar projects in the past.

Read more about fundamentals of uranium stocks that can make them smart long-term investments.

  1. Exercise caution when investing in junior uranium stocks.

If you are interested in undertaking your uranium investing through junior or penny stocks, we recommend well-financed junior mines with no immediate need to sell shares at low prices, since that would dilute existing investors’ interests. The best junior mines have a major partner who has agreed to pay for the drilling or other exploration or development, in exchange for an interest in the property. We also prefer those that operate in an area with geology that is similar to that of nearby producing mines.

Read more about suggestions for uranium investing.

  1. Invest in uranium stocks with a diversified reserve base.

Invest in uranium stocks with a broad base of operations. Even if the company has strong reserves, the best mining company stocks with the least risk also have a diversified reserve base. That way they are not dependent on a single mine’s production or political stability in any one country. Mining companies can also increase their reserves by making acquisitions—with mineral prices down from their record highs, you may see an increase in mining company acquisitions at distressed prices.

You need to look at how long the company’s reserves are likely to last. Those with low reserves need to have consistent success in their exploration programs to maximize the production of the mine and the surrounding area. That success is far from guaranteed.

Learn more about the best characteristics of mines to invest in.

Bonus Tip: Diversify the resources segment of your portfolio with other energy stocks.

We recommend that most investors maintain some exposure to the Resources sector—including energy stocks—as part of a well-balanced portfolio.

The direction of energy prices depends on a lot of things, particularly economic growth rates around the world. Meanwhile, though, well-established companies in the energy industry can take advantage of the setback to pick up properties and employees who might be harder to find in more prosperous times.

Discover more tips for picking the right energy stocks now.

Do you find uranium to be a favourable investment or are you putting your money into other forms of energy, like renewable and green options?

Read More

Mining Stocks Post Archives

Mining Stocks: Cash flow jumps for HudBay Mineral

Mining Stocks: Cash flow jumps for HudBay Mineral

The gold, silver, copper and zinc miner significantly increased its output in the latest quarter—a move that’s lifted revenue as well as cash flow.
HUDBAY MINERALS INC. (symbol HBM on Toronto; www.hudbayminerals.com) produces base and precious metals including copper, zinc, gold and silver.
The company first… Read More

Mining Stocks: Challenges ahead for Northern Dynasty Minerals

Mining Stocks: Challenges ahead for Northern Dynasty Minerals

Pat McKeough recently replied to an Inner Circlememberlooking for an opinion on this mining stock. The company aims to mine one of Alaska’s largest copper/gold deposits, says Pat. But it faces opposition.
Q: Hi Pat. I am considering Northern Dynasty Minerals (NDM) for the aggressive part… Read More

Mining Stocks: Gains ahead for Yamana Gold

Mining Stocks: Gains ahead for Yamana Gold

The gold producer saw its cash flow soar in the latest quarter on higher output at its mines but also rising prices for the precious metal.

YAMANA GOLD (Toronto symbol YRI; www.yamana.com) owns and operates six gold mines in Canada, Mexico, Brazil, Chile and Argentina… Read More

Mining Stocks: Outlook brightens for Teck

Mining Stocks: Outlook brightens for Teck

The miner’s cash flow could nearly double in 2017 on stronger prices for metallurgic coal but also zine and copper.
TECK RESOURCES LTD. (Toronto symbol TECK.B; www.teck.com) is a leading producer of metallurgical coal, a key ingredient in steel making. It also produces copper and zinc.
The… Read More

Mining Stocks: Finning ready for growth

Mining Stocks: Finning ready for growth

Finning International Inc. lifted its earnings in the latest quarter despite low commodity prices and their impact on sales of its heavy equipment.
FINNING INTERNATIONAL INC. (Toronto symbol FTT; www.finning.com) sells and services Caterpillar-brand heavy equipment in Canada, South America and the U.K. Its main customers… Read More

Mining company stocks: What to look for before you invest

Mining company stocks: What to look for before you invest

The best mining company stocks will have a record of success and a strong management team
Mining company stocks involve the exploration for, and the development and production of minerals. While sometimes risky, mining stocks can also be strong performers when commodity prices move up.
We think… Read More