Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 stocks made the list for top value stocks in the Metals & Mining 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.

Why Focus on Undervalued Metals & Mining 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.

6 Undervalued Metals & Mining Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 6 undervalued stocks in the Metals & Mining industry for Tuesday, October 29, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Metals & Mining 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.

Alpha Metallurgical Resources, Inc.’s Value Grade

Value Grade:

Alpha Metallurgical Resources, Inc., a mining company, produces, processes, and sells met and thermal coal in Virginia and West Virginia. The company offers metallurgical coal products. It operates twenty-two active mines and nine coal preparation and load-out facilities. The company was formerly known as Contura Energy, Inc. and changed its name to Alpha Metallurgical Resources, Inc. in February 2021. Alpha Metallurgical Resources, Inc. was incorporated in 2016 and is headquartered in Bristol, Tennessee.

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.

Alpha Metallurgical Resources, Inc. has a Value Score of 96, which is considered to be undervalued.

When you look at Alpha Metallurgical Resources, Inc.’s price-to-sales ratio at 0.85 compared to the industry median at 1.93, this company has a lower price relative to revenue compared to its peers. This could make Alpha Metallurgical Resources, Inc.’s stock more attractive for value investors.

Alpha Metallurgical Resources, Inc.’s price-earnings ratio is 6.20 compared to the industry median at 19.40. This means it has a lower share price relative to earnings compared to its peers. This could make Alpha Metallurgical Resources, Inc. more attractive for value investors.

Now, let’s assess Alpha Metallurgical Resources, Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 3.4, when compared to the industry median of 8.6, 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. Alpha Metallurgical Resources, Inc.’s shareholder yield is higher than its industry median ratio of (1.50%). 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. Alpha Metallurgical Resources, Inc.’s price-to-book ratio is lower than its industry median ratio of 1.78. This could make Alpha Metallurgical Resources, Inc. more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Alpha Metallurgical Resources, Inc.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Alpha Metallurgical Resources, Inc.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 25.70. This could make Alpha Metallurgical Resources, Inc. more attractive because the lower P/FCF ratio indicates that Alpha Metallurgical Resources, Inc. is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Arch Resources, Inc.’s Value Grade

Value Grade:

Arch Resources, Inc. engages in the production and sale of metallurgical products. It operates in two segments, Metallurgical and Thermal. The company operates active mines. It owned or controlled primarily through long-term leases of coal land in Ohio, Maryland, Virginia, West Virginia, Wyoming, Kentucky, Montana, Pennsylvania, Colorado, and Illinois; and smaller parcels of property in Alabama, Indiana, Washington, Arkansas, California, Utah, and Texas. The company sells its products to utility, industrial, and steel producers in the United States and internationally. Arch Resources, Inc. was incorporated in 1969 and is headquartered in Saint Louis, Missouri.

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.

Arch Resources, Inc. has a Value Score of 85, which is considered to be undervalued.

Arch Resources, Inc.’s price-earnings ratio is 10.4 compared to the industry median at 19.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Arch Resources, Inc. more attractive for value investors.

Arch Resources, Inc.’s price-to-book ratio is lower than its peers. This could make Arch Resources, Inc. fairly attractive for value investors when compared to the industry median at 1.78.

You can read more about Arch Resources, Inc.’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.

Compass Minerals International, Inc.’s Value Grade

Value Grade:

Compass Minerals International, Inc., provides essential minerals in the United States, Canada, the United Kingdom, and internationally. It operates through two segments, Salt and Plant Nutrition. The Salt segment produces, markets, and sells sodium chloride and magnesium chloride, including rock salt, mechanically and solar evaporated salt, and brine and flake magnesium chloride products; and purchases potassium chloride and calcium chloride to sell as finished products or to blend with sodium chloride to produce specialty products. This segment provides products for use as a deicer for roadways, consumer, and professional use; as an ingredient in chemical production; for water treatment, human, and animal nutrition; and for various other consumer and industrial uses, as well as records management services. The Plant Nutrition segment produces sulfate of potash specialty fertilizers in various grades that are used in broadcast spreaders, direct application, and liquid fertilizer solutions under the Protassium+ brand name; turf products used by the turf and ornamental markets, as well as for blends used on golf course greens; organic products; and develops and produces a portfolio of magnesium chloride-based aerial and ground fire retardant products. This segment provides its products to distributors and retailers of crop inputs, as well as growers. The company was formerly known as Salt Holdings Corporation and changed its name to Compass Minerals International, Inc. in December 2003. Compass Minerals International, Inc. was founded in 1844 and is headquartered in Overland Park, Kansas.

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.

Compass Minerals International, Inc. has a Value Score of 72, which is considered to be undervalued.

Compass Minerals International, Inc.’s price-to-book ratio is higher than its peers. This could make Compass Minerals International, Inc. less attractive for value investors when compared to the industry median at 1.78.

You can read more about Compass Minerals International, Inc.’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.

Ramaco Resources, Inc.’s Value Grade

Value Grade:

Ramaco Resources, Inc. engages in the development, operation, and sale of metallurgical coal. Its development portfolio includes the Elk Creek project that covers an area of approximately 20,200 acres located in southern West Virginia; the Berwind property covering an area of approximately 62,500 acres situated on the border of West Virginia and Virginia; the Knox Creek property, which covers an area of approximately 64,050 acres is located in Virginia; the Maben property covering an area of approximately 28,000 acres situated in southwestern Pennsylvania southern West Virginia; and the Brook Mine property that covers an area of approximately 16,000 acres located in northeastern Wyoming. The company serves blast furnace steel mills and coke plants in the United States, as well as metallurgical coal consumers internationally. Ramaco Resources, Inc. was founded in 2015 and is headquartered in Lexington, Kentucky.

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.

Ramaco Resources, Inc. has a Value Score of 94, which is considered to be undervalued.

Ramaco Resources, Inc.’s price-earnings ratio is 10.5 compared to the industry median at 19.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Ramaco Resources, Inc. more attractive for value investors.

Ramaco Resources, Inc.’s price-to-book ratio is higher than its peers. This could make Ramaco Resources, Inc. less attractive for value investors when compared to the industry median at 1.78.

You can read more about Ramaco Resources, Inc.’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.

ArcelorMittal S.A.’s Value Grade

Value Grade:

ArcelorMittal S.A., together with its subsidiaries, operates as integrated steel and mining companies in the United States, Europe, and internationally. It offers semi-finished flat products, including slabs; finished flat products comprising plates, hot- and cold-rolled coils and sheets, hot-dipped and electro-galvanized coils and sheets, tinplate, and color coated coils and sheets; semi-finished long products, such as blooms and billets; finished long products consisting of bars, wire-rods, structural sections, rails, sheet piles, and wire-products; and seamless and welded pipes and tubes. The company also provides mining products, such as iron ore lumps, fines, concentrates, pellets, and sinter feeds; and coking coal. It sells its products to various customers in the automotive, appliance, engineering, construction, energy, and machinery industries through a centralized marketing organization, as well as distributors. The company has iron ore mining activities in Brazil, Bosnia, Canada, Liberia, Mexico, South Africa, and Ukraine. ArcelorMittal S.A. was founded in 1976 and is headquartered in Luxembourg City, Luxembourg.

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.

ArcelorMittal S.A. has a Value Score of 89, which is considered to be undervalued.

ArcelorMittal S.A.’s price-to-book ratio is higher than its peers. This could make ArcelorMittal S.A. less attractive for value investors when compared to the industry median at 1.78.

You can read more about ArcelorMittal S.A.’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.

Taseko Mines Limited’s Value Grade

Value Grade:

Taseko Mines Limited, a mining company, acquires, develops, and operates mineral properties. It explores for copper, molybdenum, gold, niobium, and silver deposits. The company’s principal asset comprises 100% interest owned the Gibraltar mine located in British Columbia. It also holds interest in the Yellowhead copper project, the Aley niobium project, and the New Prosperity gold and copper project located in British Columbia; and the Florence copper project located in Arizona. Taseko Mines Limited was incorporated in 1966 and is headquartered in Vancouver, Canada.

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.

Taseko Mines Limited has a Value Score of 62, which is considered to be undervalued.

Taseko Mines Limited’s price-earnings ratio is 19.6 compared to the industry median at 19.4. This means that it has a higher price relative to its earnings compared to its peers. This makes Taseko Mines Limited less attractive for value investors.

Taseko Mines Limited’s price-to-book ratio is higher than its peers. This could make Taseko Mines Limited less attractive for value investors when compared to the industry median at 1.78.

You can read more about Taseko Mines Limited’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 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 stocks as well as other industrys.

Choosing Which of the 6 Best Metals & Mining 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.

• Alpha Metallurgical Resources, Inc. stock has a Value Grade of A.
• Arch Resources, Inc. stock has a Value Grade of A.
• Compass Minerals International, Inc. stock has a Value Grade of B.
• Ramaco Resources, Inc. stock has a Value Grade of A.
• ArcelorMittal S.A. stock has a Value Grade of A.
• Taseko Mines Limited stock has a Value Grade of B.

Now that you have a bit more background about each of the 6 undervalued stocks in the Metals & Mining 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 Stocks

Want to learn more about Metals & Mining 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.

• 6 Undervalued Metals & Mining Stocks for Tuesday, October 29
• 6 Undervalued Metals & Mining Stocks for Monday, October 28
• 4 Undervalued Metals & Mining Stocks for Friday, October 25
• 3 Undervalued Metals & Mining Stocks for Thursday, October 24

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.