Our best buy ideas in Resources
Last week, Market Matters hosted a Resource Round Table to give an overview of the commodity market, and then delve into picks that give exposure to it, big and small.
We were joined by analysts from Shaw & Partners Andrew Hines, who covers small/mid cap resources & Peter O’Connor, senior resource analyst covering large + some mid caps, who shared their best buy ideas.
Topics discussed and timestamps:
GOLD - 3:08
- Bullish/bearish & why?
- NCM, what’s happening operationally?
- Most upside in your coverage?
- Small Caps: one that Andrew's particularly keen on, how much risk is there and what’s the time frame for it to do something?
- Anything at the really speculative end of town to highlight?
- How should we think about the backdrop for Iron Ore prices throughout FY21 at beyond?
- How should we be positioning towards the sector from here?
- If prices stay higher for longer, what does a stock like FMG worth?
- Anything interesting in the smaller space?
NICKEL - 26:00
- Nickel prices have been strong of late and the backdrop is a solid one when thinking about the demand side of the equation coming from growth in battery power. What does the supply side look like here?
- It’s slim picking in Australia for pure Nickel exposures that are actually producing. Nickel Mines is one, how does that stack up?
- Nickel is up, but Western Areas is down - what’s happening with that level of underperformance?
- Explorers - anything to highlight?
COPPER - 36:03
- Copper has been a real standout, Oz Minerals was one of the largest positions which has done very well - does it keep going from here?
- Quality v price is a concept that we continually grapple within the market – one side of the ledger is Oz that has been operationally very good for the past 5 years, on the other end is Sandfire, operationally tough, issues with mine life etc, is it worth being there when Oz has been delivering?
- Any other highlights in the Copper space
MINERAL SANDS - 43:31
- Strandline (STA) - what’s the thesis here?
- The proximity to Iluka, a stock that’s had a really good run. What’s the take on that here?
WHAT ELSE LOOKS INTERESTING HERE - 51:19
Anything’s else that Andrew and Peter think has been overlooked, anything that’s really caught their eye in the last little bit:
- Coking coal
Just a reminder to all that the information/discussion here is of a general nature only.
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James is Portfolio Manager & Primary Author at Market Matters, a daily investment report with over 2500 subscribers that offers real market insight. He is also Senior Portfolio Manager within Shaw and Partners heading up a team that manages...