2017 has generally been a good year for mining stocks so far. I didn’t find it too difficult to locate 4 mining stocks which are at least 6% higher this year, with the following companies all having done so at the time of writing.
Rio Tinto plc’s (LON:RIO) (LSE:RIO.L) stock price is 6% up on its 2017 starting level. I’m optimistic about its long term investment outlook because I feel it has a good strategy under its present management. I think investment in iron ore is important, but I like the investment it is making in other commodities in order to try and diversify the business. I’m reasonably upbeat about iron ore’s potential and think this will help to improve Rio Tinto’s stock price performance. Volatility could be ahead, but in my view the long term returns could be relatively strong.
Anglo American plc’s (LON:AAL) (LSE:AAL.L) stock price has gained 6.2% this year so far. I think there could be more to come in 2017, as I feel the full effects of its restructuring are yet to be fully felt. I’m optimistic about its new structure and think asset disposals and efficiencies have created a stronger business for the long term. In my view, Anglo American could benefit from improving investor sentiment if profit growth follows its reorganisation. Therefore, I’m relatively bullish on its stock price potential.
Another mining stock which has made progress with transforming its business model is Glencore PLC (LON:GLEN) (LSE:GLEN.L). Its stock price is 17% higher now than it was at the start of the year. Although some of its future growth potential may now have been priced in by investors, I think the company’s diversified operations and relatively stable outlook could help it to perform well relative to mining sector peers. While more volatility could be ahead, I now think Glencore has the balance sheet and cash flow to prosper as an investment in the long term.
Reporting today was precious metals miner Hochschild Mining Plc (LON:HOC) (LSE:HOC.L) Its revenue increased from $469.1 million in 2015 to $699.2 million in 2016, with adjusted EBITDA rising from $138.8 million to $329 million. In my view, this is an impressive result in its first full year of production from the flagship Inmaculada mine. Hochschild has also benefitted from a more favourable pricing environment and a strong overall cost performance in my view.
As someone who is optimistic about gold and silver prices, I think Hochschild’s stock price could make more gains in the long run following its 10% rise since the start of the year.