Will Antofagasta plc Shares Outperform Rio Tinto plc, Tullow Oil plc, Glencore PLC And BHP Billiton plc After Results?

Do Antofagasta plc (LON:ANTO) (LSE:ANTO.L) shares have more investment appeal than shares in Rio Tinto plc (LON:RIO) (LSE:RIO.L), Tullow Oil plc (LON:TLW) (LSE:TLW.L), Glencore PLC (LON:GLEN) (LSE:GLEN.L) and BHP Billiton plc (LON:BLT) (LSE:BLT.L)?

Antofagasta plc
Antofagasta plc

Antofagasta plc (LON:ANTO) (LSE:ANTO.L) shares are 0.4% lower today after it released results for 2016 to the stock market. Antofagasta increased copper production by 12.5% to 709,400 tonnes in what was a year of operational delivery. This puts it on a stronger and larger production base for the long term. It was able to successfully integrate Zaldivar and ramp-up Antucoya alongside the completion of the expansion of Centinela Concentrates.

As well as production growth and potential. Antofagasta’s shares could also benefit from profitable growth. It has sought to improve productivity, boost efficiencies and reduce costs. This led to sustainable mine site cost reductions of $174 million in 2016. This boosted cash flow from operations by 70% to $1.5 billion during the year, while Antofagasta’s EBITDA margins were raised from 28% to 45% due to the changes it has made to its business.

In my view, the changes made to Antofagasta’s business put it on a stronger footing for the long term. Although the company expects to see a shift from a copper market in balance to a slight deficit which could improve prices, I feel the changes Antofagasta made to its business in terms of efficiencies and higher productivity will stand it in good stead in future years.

In 2017, Antofagasta shares have outperformed other resources shares such as Rio Tinto plc (LON:RIO) (LSE:RIO.L), Tullow Oil plc (LON:TLW) (LSE:TLW.L), Glencore PLC (LON:GLEN) (LSE:GLEN.L) and BHP Billiton plc (LON:BLT) (LSE:BLT.L). Glencore shares are 13% higher, Rio Tinto is up 4%, BHP Billiton has fallen 2% and Tullow Oil has declined 20%.

In my view, Antofagasta shares could perform well on a relative basis in the long run. I’m optimistic about the changes it has made to its business and feel the copper price may edge higher. I’m still optimistic about Tullow Oil and BHP Billiton because I’m bullish on oil, while I feel Glencore and Rio Tinto have good strategies. However, I think Antofagasta could be a good relative performer.

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