Throughout 2020, we have seen bullish sentiment surrounding mining stocks. With Covid on the rise, a presidential election in the U.S., and geopolitical tensions, investors have continued turning toward mining stocks as an investment safeguard. While there is no guarantee with any investment, mining stocks have proven to be a solid choice in the face of market adversity from a historical sense. Investors often turn to certain mining stocks as a way to hedge bets against market uncertainty.
This includes issues such as inflation, political tensions and more. In the past, we have seen that mining stocks are more often than not, less volatile than the greater market. This is because mining stocks tend to be stable in their performance and trajectories. Is this the case for all mining stocks, no, but more times than not, these stocks have acted as a safe-haven. More recently, investors have shown interest in these companies for several reasons. For one, Covid has slowed industrial growth around the world.
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But, as this pandemic begins to slow down in severity, industrialization may continue. This means more raw material use and more consumption of mined ores. In addition, precious metals stocks which are a part of the mining industry, tend to show bullish sentiment when markets are awry. With the world in the state that it is in in 2020, many investors have turned to gold and silver stocks to safeguard their investments. While we don’t know what the future will hold, we do know that in the present, mining stocks continue to look like attractive investment opportunities.Mining Stocks to Watch:
- Walcott Resources Ltd. (OTC : WALRF Stock Report) (CSE : WAL)
- Lithium Americas Corp. (LAC Stock Report)
- Vale S.A. ADR (VALE Stock Report)
Walcott Resources Ltd. is a very interesting mining company with operations around the world. Based out of Canada, Walcott Resources works in the acquisition, exploration and mining of precious metals and resources. While the company does have several mines in different countries, its primary mine is known as the Tyr Project.
This project is based in Australia and estimates have shown that it could yield a very high amount of silver ore. Specifically, analysis has shown that the Tyr Project could yield around 4,710 grams per ton of silver ore. This project, based in New South Whales, is the company’s primary silver asset. The company has just completed the acquisition of a controlling interest in this and other silver projects in the area.
In addition to this project, the company has stated that its Cobalt Hill Property also has the capability to produce a large quantity of silver. On September 11th, Walcott provided an update regarding the Cobalt Hill property. The update stated that the company will begin researching early analysis that showed high-grade gold mineralization on the property. While this research is still in its early stages, the hopes are that it could yield a great degree of gold production.
One of the things to take note of is what’s happening in silver right now. There’s been a lot of volatility in the stock market today and over the last week. The main point of focus comes with any pullback silver has had, it has been followed by a rebound. Since September 24th, through the ebb and flow of silver prices, the overall trend remains bullish. Will this same sentiment echo across other silver stocks like Walcott?Mining Stocks to Watch #2: Lithium Americas Corp.
Lithium Americas Corp. is one of the leading mining stocks for all things related to lithium. For those questioning the importance of lithium, there are a few things to know. For one, lithium is used in just about every battery in the modern day. This includes television remotes all the way to electric cars and solar panels.
In the past few months, shares of LAC stock have shot up by quite a large margin. One of the major drivers of LAC stock is the electric car market. With Tesla (TSLA Stock Report) shooting up in value in the past year, LAC has followed suit. While there are a lot of upsides to this correlation, the downside is that this makes LAC stock more volatile than most.
During intraday trading on October 19th, shares of LAC stock shot up by around 13% before falling down to a 6% gain later on. In the past six month period, share prices have jumped by over 320% which is incredibly substantial and should not be ignored. While Lithium America is considered to be a mining stock, it does trade more off of speculation than many others.
This means that prices can fluctuate quite a lot depending on the news. While this can be a benefit to some investors, those who want a more stable mining stock to watch may want to pick a less volatile company.Mining Stocks to Watch #3: Vale S.A. ADR
Vale S.A. ADR is a producer and wholesaler of iron ore and raw materials for steel in many countries around the world. The company has several subsidiaries that together produce various raw metals for sale internationally. Through these, the company is able to operate in a very broad area of the mining industry.
Recently, the company announced that it has agreed to form a joint venture with the Ningbo Zhoushan Port Company. This deal will offer 50% of the JV in exchange for a contribution of roughly $109 million on the low end. Once it receives regulatory approval, Vale expects that construction will be completed within 3 years or so.
On October 8th, Itau BBA, a rating agency, stated that VALE stock now has a price target of $15. Since the beginning of the month, shares of VALE stock have shot up by around 6%. In the past six months, that number jumps up to around 38%. Because Vale S.A. ADR is such a broad company, many believe that it will be one of the mining stocks to watch for a longer-term. This is because Vale offers a very wide scope when it comes to market exposure. As the largest producer of iron ore and nickel in the world, Vale S.A. ADR should remain on any mining stock watchlist.