Copper Equities Getting Cheaper as Price Gets Stronger

Source:

Raymond James said today producers were now trading at an estimated weighted average P/NAV multiple of 0.70 times compared to a P/NAV of 0.78 times at the end of May, while the average copper price along the copper forward curve has increased 2.6% from US$3.41/lb to $3.50/lb.

Copper equities have underperformed the underlying commodity price which has resulted in various copper equities now being inexpensive.

Raymond James said today producers were now trading at an estimated weighted average P/NAV multiple of 0.70 times compared to a P/NAV of 0.78 times at the end of May, while the average copper price along the copper forward curve has increased 2.6% from US$3.41/lb to $3.50/lb.

Base metals and mining analyst Tom Meyer said this analysis suggested that a "riskless" profit could be made by selling short the copper metal and buying copper equities.

The total market cap of producers covered by the dealer declined by 11% since the end of May, while the average copper price along the forward curve showed the increase of 2.6%. Meyer said almost all copper equities, excluding African Copper (TSX:ACU) and Ivanhoe Mines (TSX:IVN) were now inexpensive...

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