In March 2020, during the early days of the pandemic, the cash price hit a multi-year low of $ 4,617 per tonne on the London Metal Exchange, which is owned by the Hong Kong Exchanges and Clearing.
Then, recently, along with many asset classes, but especially commodities, copper rose to the current multi-year highs of about $ 9,990 (note that the futures prices at the CME, owned by the CME Group ] (NASDAQ 🙂 are listed by the pound and are currently shy of $ 4.6). Copper is up about 28% since the start of the year.
Meanwhile, the markets are also paying attention and prices. So far this year, silver is up about 4% and gold is down about 6%. Bullion bulls are hoping for a rally in these metals for the rest of the year.
In previous articles we discussed different mining groups. They include:
Anglo American (LON 🙂 (OTC 🙂 – ~ 27% YTD up (discussed here);
Antofagasta (LON 🙂 (OTC 🙂 – ~ 28% YTD up (discussed here);
BHP Group (LON 🙂 (NYSE 🙂 – ~ 19% YTD increase (discussed here);
Fresnillo (LON 🙂 (OTC 🙂 – decreased ~ 24% YTD (discussed here);
Glencore (LON 🙂 (OTC 🙂 – ~ 26% YTD increase (discussed here); and
Rio Tinto (LON 🙂 (NYSE 🙂 – ~ 13% YTD increase (discussed here).
Today we extend the discussion to another FTSE 100 member, namely Polymetal International (LON 🙂 (OTC :), a miner who can appeal to readers who are especially optimistic about gold, silver and copper
Polymetal International
Polymetal International Weekly Chart.
Polymetal International operates in Russia. and Kazakhstan. The main mine is Kyzyl in northeastern Kazakhstan. While most investors associate the group's business with gold, it also mines other metals such as silver and copper.
POLYP shares, which are down YTD about 8%, closed at 1,593p (or US $ 26.76) on May 6. In other words, the stock price mirrored that of gold in recent months. The current stock price supports a 5.8% dividend yield and the market capitalization is £ 7.53 billion (or US $ 10.46).
On March 3, the group provisionally released the year ending December 31. In 2020, sales increased 28% year-on-year to a total of $ 2.86 billion. A year ago it had been $ 2.24 billion. In 2020, net income was a record $ 1,086 million, with basic earnings per share of $ 2.30 per share. In 2019, the comparable figures were $ 483 million and $ 1.02 per share.
Free cash flow was $ 610 million, compared to $ 256 million in 2019. Finally, the total dividend for FY 2020 was $ 1.29 per share, up 57% from 82 cents a share in 2019. Analysts were generally satisfied with the robust results.
The production results released on April 22 further showed that first quarter FY21 sales were $ 593 million, up 20% year-on-year.
Group CEO Vitaly Nesis said:
" In Q1 2021, Polymetal delivered strong production, strong free cash flow and steady progress on all development projects."
The expected price / earnings ratio and price / earnings ratio of the POLYP stock are 10.86 and 3.55 respectively. We like the stock at its current level and would consider investing for the long term. Potential price increases of precious metals, particularly gold and silver, would continue to hold POLYP stocks in the back. Passive income seekers would also be entitled to juicy dividends.
Bottom Line
Our regular readers would know that we are optimistic about metals, including copper, gold and silver. Low interest rates in the US, UK and many countries mean that many investors will spend part of their portfolio on commodities. A large number of mining stocks is likely to continue to blind.
Those investors who are not willing to invest capital in one stock like POLYP might also consider buying an ETF. Examples include:
ETFMG Prime Junior Silver Miners ETF (NYSE 🙂 – ~ 1.5% YTD increase;
Global X Silver Miners ETF (NYSE 🙂 – down ~ 0.4% YTD;
Global X Copper Miners ETF (NYSE 🙂 – up ~ 40.5% YTD;
IShares MSCI Global Gold Miners ETF (NASDAQ 🙂 – increase ~ 3.4% YTD;
IShares MSCI Global Silver and Metals Miners ETF (NYSE 🙂 – down ~ 2.2% YTD;
United States Copper Index Fund (NYSE 🙂 – up ~ 30.3% YTD;
VanEck Vectors Gold Miners ETF (NYSE 🙂 – up ~ 2.4% YTD.
