Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 3 stocks made the list for top value stocks in the Metals & Mining - Diversified industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Latest Metals & Mining - Diversified Stock News

Before choosing which top Metals & Mining - Diversified stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

The fundamental outlook for the diversified metals & mining sub-industry for the next 12 months is neutral. Base metals saw a significant decline in price as a result of the COVID-19 pandemic followed by a strong price recovery in 2021. This continued into early 2022 due to the supply risk from the Russia/Ukraine conflict. Since then, commodity prices have fallen significantly as a result of hawkish central banks, an appreciating U.S. dollar and heightened risks of a global recession. Large companies in the sub-industry generate a majority of their revenue through iron ore sales, which has slowly declined in price throughout 2022. Copper, which most diversified miners have meaningful exposure too, has also seen a decline in price. However, the long-term demand outlook for copper is positive. As of September 16, 2022, the year-to-date decline for the S&P 1500 Diversified Metals & Mining Index was 19.7% versus the S&P Composite 1500 Index decline of 18.6%. In 2021, the S&P 1500 Diversified Metals & Mining Index increased 6.3% versus the S&P Composite 1500 Index up 26.7%. As of September 16, 2022, the five-year compound annual growth rate (CAGR) for the S&P 1500 Diversified Metals & Mining Index was negative 1.3% versus the S&P Composite 1500 Index CAGR of 8.7%.

Why Focus on Undervalued Metals & Mining - Diversified Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

Click the button below to learn more about A+ Investor and subscribe today.

3 Undervalued Metals & Mining - Diversified Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 3 undervalued stocks in the Metals & Mining - Diversified industry for Monday, February 12, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Metals & Mining - Diversified industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Anglo American plc (ADR)’s Value Grade

Value Grade:

Anglo American PLC is a mining company with a portfolio of mining and processing operations and undeveloped resources. The Company?s segments include De Beers, Copper, Platinum Group Metals, Iron Ore, Steelmaking Coal, Nickel, Manganese and Crop Nutrients. De Beers is engaged in the diamond business, which offers rough and polished diamonds. Its Copper projects include Quellaveco copper, Los Bronces, El Soldado, and Collahuasi. Its Platinum Group Metals owns and operates five mining operations in South Africa?s Bushveld complex, including Mogalakwena, Amandelbult and Mototolo, as well as the Unki mine, in Zimbabwe. Its Iron Ore operations provide customers with iron ore content through assets in Brazil and South Africa. Its Steelmaking Coal business includes five operating mines, along with additional development projects and joint-venture interests. Its Nickel business consists of mine assets in Brazil, with two ferronickel production sites: Barro Alto and Codemin.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Anglo American plc (ADR) has a Value Score of 91, which is considered to be undervalued.

When you look at Anglo American plc (ADR)’s price-to-sales ratio at 0.80 compared to the industry median at 2.25, this company has a lower price relative to revenue compared to its peers. This could make Anglo American plc (ADR)’s stock more attractive for value investors.

Anglo American plc (ADR)’s price-earnings ratio is 12.62 compared to the industry median at 12.83. This means it has a lower share price relative to earnings compared to its peers. This could make Anglo American plc (ADR) more attractive for value investors.

Now, let’s assess Anglo American plc (ADR)’s EV/EBITDA ratio, also known as enterprise multiple. At 4.9, when compared to the industry median of 5.9, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Anglo American plc (ADR)’s shareholder yield is higher than its industry median ratio of (1.27%). Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Anglo American plc (ADR)’s price-to-book ratio is lower than its industry median ratio of 1.00. This could make Anglo American plc (ADR) more attractive to investors looking for a new addition to their portfolio.

Rio Tinto plc (ADR)’s Value Grade

Value Grade:

Rio Tinto plc is a United Kingdom-based mining and metals company. The Company operates in 35 countries where it produces iron ore, copper, aluminum, critical minerals and other materials needed for the global energy transition. Its segments include Iron Ore, Aluminum, Copper, and Minerals. Iron Ore segment is engaged in mining and salt and gypsum production in Western Australia. Aluminum segment is engaged in bauxite mining, alumina refining, and aluminum smelting. Copper segment is engaged in mining and refining of copper, gold, silver, molybdenum, other by-products and exploration activities which is the responsibility of the Copper product Company chief executive. Minerals segment includes businesses with products such as borates, titanium dioxide feedstock together with the iron ore company of Canada (iron ore mining and iron concentrate/pellet production). It also includes diamond mining, sorting and marketing and development projects for battery minerals, such as lithium.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Rio Tinto plc (ADR) has a Value Score of 69, which is considered to be undervalued.

Rio Tinto plc (ADR)’s price-earnings ratio is 12.8 compared to the industry median at 12.8. This means that it has a higher price relative to its earnings compared to its peers. This makes Rio Tinto plc (ADR) fairly attractive for value investors.

Rio Tinto plc (ADR)’s price-to-book ratio is lower than its peers. This could make Rio Tinto plc (ADR) more attractive for value investors when compared to the industry median at 1.00.

You can read more about Rio Tinto plc (ADR)’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Teck Resources Ltd (USA)’s Value Grade

Value Grade:

Teck Resources Limited is a Canada-based mining company that operates in copper, zinc, steelmaking coal and energy segment. The Company’s operations and projects include Antamina, Cardinal River, Carmen de Andacollo, Elkview, Fording River, Fording River Extension, Fort Hills, Galore Creek Project, Greenhills, Highland Valley Copper, HVC 2040, Line Creek, NewRange Copper Nickel, NuevaUnion, Quebrada Blanca, Quebrada Blanca Phase II, Quintette Project, Red Dog, Sullivan Mine and Trail Operations. The Antamina mine is a large copper and zinc mine, located in the Andes Mountain range of Peru. Its Carmen de Andacollo is located in the Coquimbo Region of central Chile. The Fording River Extension Project is located adjacent and to the south of Teck’s existing Fording River Operations. Its Galore Creek is located within the territory of the Tahltan in northwestern British Columbia, approximately 150 kilometers northwest of Stewart.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Teck Resources Ltd (USA) has a Value Score of 69, which is considered to be undervalued.

Teck Resources Ltd (USA)’s price-earnings ratio is 8.7 compared to the industry median at 12.8. This means that it has a lower price relative to its earnings compared to its peers. This makes Teck Resources Ltd (USA) more attractive for value investors.

Teck Resources Ltd (USA)’s price-to-book ratio is lower than its peers. This could make Teck Resources Ltd (USA) fairly attractive for value investors when compared to the industry median at 1.00.

You can read more about Teck Resources Ltd (USA)’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Metals & Mining - Diversified Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Metals & Mining - Diversified stocks as well as other industrys.

Choosing Which of the 3 Best Metals & Mining - Diversified Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Anglo American plc (ADR) stock has a Value Grade of A.
• Rio Tinto plc (ADR) stock has a Value Grade of B.
• Teck Resources Ltd (USA) stock has a Value Grade of B.

Now that you have a bit more background about each of the 3 undervalued stocks in the Metals & Mining - Diversified industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Metals & Mining - Diversified Stocks

Want to learn more about Metals & Mining - Diversified stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 3 Undervalued Metals & Mining - Diversified Stocks for Monday, February 12
• 3 Undervalued Metals & Mining - Diversified Stocks for Friday, February 09
• Why Ivanhoe Electric Inc’s (IE) Stock Is Up 5.16%
• 3 Undervalued Metals & Mining - Diversified Stocks for Monday, February 05

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.