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Resource Stocks Stock Whispers

Top Cobalt Stocks for 2024

Cobalt, a crucial element for manufacturing, plays an essential role in the production of electric vehicle (EV) batteries, industrial equipment, and paints. Typically sourced as a byproduct of copper or nickel refining, cobalt’s significance has surged alongside the rise in demand for lithium-ion batteries, which power not just EVs but a vast array of electronic devices. However, the commodity has faced a volatile journey, with prices soaring during the pandemic only to plummet dramatically in recent years. For traders and investors, the question now is whether cobalt still represents a strategic opportunity in the broader context of energy transition and battery technology.

Market Dynamics: From Shortage to Surplus

During the COVID-19 pandemic, cobalt prices rose sharply due to escalating demand for batteries in consumer electronics and electric vehicles. Mining companies around the world ramped up production in response, leading to an unexpected surplus in the cobalt market. However, several factors subsequently drove demand down. The development of low-cobalt or cobalt-free batteries, growing concerns over the environmental and human rights abuses in the Democratic Republic of Congo (DRC) — where over 70% of the world’s cobalt was mined in 2022 — and increased recycling efforts have all contributed to cobalt’s decline. As a result, cobalt’s spot price has fallen by over 60% from its peak two years ago, as of mid-August 2024.

Investment Outlook: Still Relevant or Past Its Prime?

Despite this recent downturn, cobalt continues to be a staple in most EV batteries, which still accounts for a significant portion of its demand. Investors who believe in the continued relevance of cobalt in battery technology and renewable energy may still find value in cobalt-related stocks. However, it is crucial to recognize the volatility of the cobalt market, especially since cobalt is predominantly a byproduct of other metals like copper and nickel. Pure-play cobalt stocks are rare, and many aren’t even listed on U.S. exchanges, making direct investment more challenging.

For those looking to hedge their bets, a diversified approach might include shares in international mining ETFs like the iShares MSCI Global Metals & Mining Producers ETF (PICK) or the Amplify Lithium & Battery Technology ETF (BATT). These funds invest in companies heavily involved in battery technology and metals production, offering exposure to the broader market beyond just cobalt.

Top Cobalt Stocks to Watch in 2024

Several major players are involved in cobalt production, either directly or indirectly. Here are seven stocks worth watching:

  1. BHP Group (NYSE: BHP)
    • Market Cap: $135 billion
    • Overview: One of the largest mining companies globally, BHP Group is a significant player in base materials and energy production, including copper and nickel — both of which yield cobalt as a byproduct. The company’s strong profit margins and innovative partnerships, like its venture with AI startup KoBold Metals, position it well for continued growth in battery materials.
  2. Vale S.A. (NYSE: VALE)
    • Market Cap: $43.9 billion
    • Overview: A Brazilian mining giant, Vale is a top producer of iron, nickel, and copper, with ancillary cobalt production. While cobalt is not a major revenue driver for Vale, the company benefits from its scale and diversification, maintaining solid operating margins across its portfolio.
  3. Glencore (OTC: GLNCY)
    • Market Cap: $62.7 billion
    • Overview: As one of the world’s largest cobalt producers, primarily through its copper mines in the DRC, Glencore remains a major player in the cobalt space. However, it is not listed on U.S. exchanges, and its profit margins have not matched those of some competitors.
  4. Freeport-McMoRan (NYSE: FCX)
    • Market Cap: $59.7 billion
    • Overview: Based in Arizona, Freeport-McMoRan is a leading global producer of copper and derives cobalt as a byproduct. The company’s strategic divestments in cobalt refining while retaining a stake in the business highlights its adaptable approach to the commodity markets.
  5. Wheaton Precious Metals (NYSE: WPM)
    • Market Cap: $26.2 billion
    • Overview: Unlike traditional miners, Wheaton Precious Metals operates as a streaming company, pre-purchasing a portion of miners’ output at a discounted price. Its exposure to cobalt adds a unique angle to its primarily precious metals-focused portfolio, offering diversification and steady dividends.
  6. CMOC Group Ltd. (OTC: CMCLF)
    • Market Cap: $20.6 billion
    • Overview: Based in China, the world’s largest EV market, CMOC Group Ltd. is the second-largest cobalt producer globally, deriving the metal from its copper mining operations in the DRC. While not listed on U.S. exchanges, it features in several international ETFs, providing alternative investment routes.
  7. Cobalt Blue Holdings (OTC: CBBH.F)
    • Market Cap: $22.3 million
    • Overview: A high-risk, high-reward penny stock, Cobalt Blue Holdings is currently in the development stage, focusing on the Broken Hill Cobalt Project in Australia. While the project’s future is uncertain due to market oversupply, it could emerge as a key player if successful.

Investment Strategy: Navigating the Cobalt Market

Given the volatility inherent in commodity markets, investing in cobalt stocks requires a careful strategy. Focus on companies with diversified portfolios, stable profit margins, and exposure to multiple growth areas within the mining sector. ETFs that cover a broader range of battery materials might offer a more balanced approach for those seeking to mitigate risk while still capitalizing on the long-term growth prospects of the energy transition.

Key Takeaways for Investors

  • Volatility Remains High: Cobalt prices have been highly volatile, and the trend is likely to continue amid changing supply-demand dynamics and geopolitical concerns.
  • Diversification Is Crucial: Due to the lack of pure-play cobalt stocks, diversifying investments across related sectors or through ETFs could provide better risk management.
  • Long-Term Potential in EVs and Renewables: Cobalt’s role in EV batteries and renewable energy suggests it could still be an attractive bet for long-term investors, despite recent setbacks.

Conclusion

Cobalt may not currently be the darling of the commodities market, but its continued relevance in battery technology makes it a critical component to watch. Investors should weigh the risks and opportunities carefully, keeping an eye on emerging technologies and geopolitical developments that could further impact the market.

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Latest Market News Stock Whispers

Three Beaten-Down Stocks Ready to Bounce Back

While the adage “buy the dip” often rings true in volatile markets, it’s currently proving to be a difficult strategy to execute. The S&P 500’s impressive rally in 2024 has left few opportunities for bargain hunters. Of the 503 companies in the index, a whopping 229 are up more than 20% year-to-date, while just 26 have fallen by 20% or more. For value investors, this scarcity of “dips” to buy is making stock picking a real challenge.

The hardest-hit sectors in 2024 have been healthcare, consumer cyclical, and consumer defensive, each with several stocks down 20% or more. Here are three companies from these sectors that show promise for a turnaround in the remaining months of 2024 and into 2025.

Healthcare Pick: Dexcom (DXCM) – Preparing for a Comeback

Dexcom (NASDAQ: DXCM), a leading player in the continuous glucose monitoring (CGM) space, has seen its stock price drop by nearly 41% in 2024 and 27% over the past year. Despite the disappointing performance, the company is positioning itself for a recovery. In Q2 2024, Dexcom launched its new Dexcom ONE+ system in several European markets, expanding its reach to 18 countries outside the U.S.

While sales growth from new customers slowed slightly in Q2, Dexcom still reported a 15% revenue increase to $1.0 billion and a 23% rise in non-GAAP operating income to $195.4 million. The company’s guidance for 2024 projects $4.025 billion in revenue, representing a 12% organic sales increase and a non-GAAP operating margin of 20%.

A temporary setback in sales growth stemmed from a realignment of the sales force, but this appears to be a strategic pause to accelerate growth into 2025. CFO Jereme M. Sylvain emphasized the company’s commitment to expanding its geographical footprint, enhancing market access, and leveraging its product portfolio to capture new opportunities. Challenges remain in the DME (durable medical equipment) market, but Dexcom is actively working to reclaim lost market share.

With CGM technology gaining traction in the healthcare sector, and despite competition from GLP-1 drugs, Dexcom’s fundamentals suggest potential for a recovery to triple digits over the next 12-18 months.

Consumer Cyclical Pick: Etsy (ETSY) – Resilience Amid Headwinds

Etsy (NASDAQ: ETSY), down nearly 32% year-to-date and 23% over the past year, continues to face challenges as consumer spending on non-essentials like arts and crafts has taken a hit amid higher living costs. This has been reflected in its Q2 2024 results, where consolidated gross merchandise sales (GMS) fell by 2.1% to $2.9 billion, and GMS per active buyer declined by 3.2% to $124.

However, there are positives for Etsy. The company’s take rate increased to 22.0% in Q2, up 110 basis points year-over-year, indicating better monetization of its platform. Furthermore, its adjusted EBITDA rose by 7.9% to $179.4 million, with a margin of 27.7%, suggesting operational efficiency amid market headwinds.

Etsy is currently valued at 16.6 times EBITDA, the lowest multiple in the past decade. For value investors, this represents a potential buying opportunity. With a solid business model and a loyal customer base, Etsy could see upside if consumer spending rebounds.

Consumer Defensive Pick: Brown-Forman (BF.B) – Ready to Rebound

Brown-Forman (NYSE: BF.B), the Louisville-based maker of iconic whiskey brands, is down over 21% in 2024 and nearly 35% over the past year. The company has been hit by a pandemic-related slowdown as wholesalers overstocked inventories, which has affected its usual 4-5% annual revenue growth rate.

Yet, Brown-Forman’s outlook is starting to improve. For fiscal 2025, the company anticipates a return to growth with organic net sales and operating income expected to rise by 3%. Despite a 1% decline in net sales in 2024 to $4.18 billion, operating income surged by 25% to $1.41 billion, reflecting a robust 33.7% operating margin.

By most valuation metrics, Brown-Forman is trading at its cheapest levels in a decade. For investors seeking a defensive play with strong fundamentals, this could be an opportune time to consider adding shares.

Key Takeaways for Investors

With the S&P 500 largely in the green this year, finding undervalued stocks requires a discerning eye. Dexcom, Etsy, and Brown-Forman each represent compelling cases for a rebound, driven by strong business models, strategic initiatives, and improving market conditions. As we move toward the end of 2024, these three stocks could offer significant upside potential for those looking to capitalize on market dips.

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Resource Stocks

Mining Stocks’ Potential Goes Unnoticed Amid AI Stock Frenzy

As the buzz around artificial intelligence companies continues to captivate investors, the steady rally in gold bullion this year has gone relatively unnoticed. Even more under the radar is the surge in mining stocks, which, despite impressive gains, have been largely overlooked by fund investors.

While the massive $69.1 billion SPDR Gold Shares ETF (GLD) — a leading exchange-traded fund (ETF) for bullion — is up 21% this year, the $14.7 billion VanEck Gold Miners ETF (GDX) has posted a notable 26% increase. Despite this outperformance, funds in Morningstar’s Equity Precious Metals category have experienced $1.7 billion in outflows, with the VanEck ETF alone losing $1.3 billion. Meanwhile, SPDR Gold Shares, classified under Morningstar’s Commodities Focused category, has seen $1.8 billion in outflows.

A key reason for the muted interest in miner stocks, beyond the preference for AI plays, could be the disappointing performance of mining funds over the past two years. In 2022, as the bear market took hold, miner stocks fell harder than gold itself, with the SPDR bullion ETF declining by just 0.8% compared to the VanEck miner ETF’s 8.8% drop. In 2023, when the bull market returned, mining stocks again lagged bullion, gaining 10.2% versus bullion’s 13.3% increase.

This deviation from historical patterns is unusual. Typically, mining stocks act as a leveraged play on gold prices, amplifying movements in bullion due to their operating leverage. In theory, miners should have significantly outperformed bullion in 2023. The surprising underperformance stems from an ironic cause: the very inflation gold is supposed to hedge against.

Operating costs for gold miners, such as wages, surged in 2022 and 2023, eating into profit margins. However, recent signs indicate that cost inflation is easing. Thomas Kertsos, manager of the top-performing First Eagle Gold Fund (SGGDX), notes that inflation rates for miners’ capital expenditures (capex) have moderated from double digits last year to single digits this year. “Most companies have said that their cost inflation is going down across the board,” Kertsos observes. This slowdown is encouraging news for investors who had been wary of rising costs.

For conservative gold investors, First Eagle Gold offers a balanced approach, holding both miners and less volatile bullion. Typically, the fund caps its exposure to gold bullion at 25%, but due to attractive valuations in the mining sector, Kertsos has favored miners over bullion this year. “Our bullion weighting was only 5% or 6% at the beginning of the year,” Kertsos mentions — the lowest in a decade. After the recent rally, bullion now comprises 15% of the fund, yet Kertsos still sees “a lot of opportunities in gold miner stocks.”

First Eagle’s portfolio is led by Wheaton Precious Metals, a mining royalty company known for its conservative approach and low-cost production, particularly from its Salobo mine in Brazil. Newer holdings, not yet disclosed by Kertsos, include both riskier smaller players like Canada’s G Mining Ventures and more established miners like Kinross Gold.

More aggressive investors may want to consider the VanEck Gold Miners ETF or its actively managed sibling, the VanEck International Investors Gold Fund (INIYX). While the VanEck ETF and the iShares MSCI Global Gold Miners ETF (RING) provide broad exposure to mining stocks, the active management approach can offer an edge. Poor management has historically plagued some smaller miners, making a selective strategy more attractive. The VanEck Junior Gold Miners ETF (GDXJ), for instance, has underperformed its peers due to weaker performance from “junior” miners.

Imaru Casanova, manager of the VanEck International Investors Gold Fund, is a strong proponent of active management in the sector. Her fund has increased its allocation to junior miners from 21% at the start of 2024 to 28% by July 31, aiming to add more “torque” in a bull market. However, these smaller miners have yet to deliver the expected outperformance. “The developers haven’t given us the leverage we would expect,” Casanova remarks. “These names should be on fire.”

One of Casanova’s key positions, G Mining Ventures, now makes up 4% of her fund, largely due to a recent acquisition that increased its market capitalization. Other new positions include Artemis Gold and Calibre Mining, both based in Canada. Casanova explains her strategic pivot: “We had been avoiding Calibre because of its production in Nicaragua, which was too risky for us. But their acquisition of Marathon Gold in Canada de-risked the company.”

The OCM Gold Fund (OCMAX) presents another viable option for investors. Managed by Gregory Orrell, with four decades of experience, the fund is positioned to capitalize on a broad recovery in the mining sector. Orrell views the current lag in junior miner performance as part of a normal cycle, saying, “The popcorn kernels go off at different temperatures.” He expects smaller players to catch up as the gold price cycle matures.

For investors willing to navigate this underappreciated sector, the potential rewards could be significant if the anticipated rebound in junior miners materializes.

Key Takeaways:

  • Mining stocks have outperformed gold bullion this year, yet investor interest remains subdued.
  • Rising operating costs and inflationary pressures have dampened mining stock performance, but cost inflation is easing.
  • Actively managed funds offer a strategic edge in navigating the diverse and complex mining sector.
  • Conservative and aggressive investors have options tailored to their risk appetites, from the balanced First Eagle Gold Fund to the more dynamic VanEck International Investors Gold Fund.
  • A rebound in junior miners could provide substantial gains for those willing to take on higher risk.
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Latest Market News Technology

Hyperscale Data Centers Positioned for Explosive Growth as AI Demand Soars

The surge in artificial intelligence (AI) adoption is propelling a dramatic rise in demand for hyperscale data centers, placing infrastructure providers at the heart of the next technological boom. Nvidia’s (NVDA) strategic partnerships with tech behemoths like Amazon’s AWS (AMZN), Alphabet’s Google Cloud (GOOGL) (GOOG), Microsoft’s Azure (MSFT), and Tesla (TSLA) underscore a pivotal trend in AI: as cutting-edge AI systems proliferate, the demand for robust data infrastructure is skyrocketing.

These collaborations have catalyzed the deployment of Nvidia’s advanced AI chips across global cloud platforms, particularly through high-profile projects like AWS’s Ceiba and the integration of Nvidia’s H100 GPUs. However, this rapid expansion in AI innovation comes with a crucial dependency—scalable, powerful data centers.

Infrastructure Fuels AI Growth

As Nvidia’s AI systems become increasingly complex, the computational load on data centers grows in tandem. Tesla’s bold plan to deploy 85,000 Nvidia H100 GPUs by the close of 2024 illustrates the immense scale of AI infrastructure requirements. These operations are sustained by hyperscale data centers, vast facilities meticulously designed to support the extraordinary computational needs of AI and other data-intensive technologies.

Unlike traditional data centers, hyperscale facilities are built for flexibility and scalability, often accommodating tens of thousands of servers and enabling rapid expansion to meet unpredictable surges in demand. This adaptability is critical as AI workloads evolve, often growing exponentially. Moreover, these centers are strategically located based on factors like energy efficiency, network latency, and natural-disaster risks, further optimizing their operations for large-scale AI applications.

Hyperscale Data Centers: Fueling AI’s Exponential Expansion

AI’s breakneck evolution has created a symbiotic relationship with data-center infrastructure, driving exponential growth in the hyperscale market. Forecasts indicate the hyperscale data-center market will skyrocket to $262.09 billion by 2032, from $44.89 billion in 2024—a compound annual growth rate (CAGR) of 24.7%. This explosive growth underscores the immense opportunities for companies involved in the infrastructure supporting AI advancements.

For investors, this opens a less conspicuous but highly lucrative avenue. While Nvidia continues to dominate headlines with its innovative AI chips, infrastructure providers—those that build and operate the hyperscale data centers enabling Nvidia’s technology—present equally compelling investment prospects. These companies are integral to the AI revolution, functioning as the backbone of data storage and processing for AI development and deployment.

Key Infrastructure Players: AI’s Unseen Powerhouses

Though they may not attract the same media attention as Nvidia, companies involved in AI infrastructure are essential to sustaining the AI boom. Here are five key players making significant strides in this sector:

  1. Equinix (EQIX) – A global leader in digital infrastructure, Equinix operates 260 data centers in 71 major metropolitan areas across the Americas, Asia-Pacific, and EMEA (Europe, Middle East, and Africa). It plays a crucial role in housing and powering AI systems globally.
  2. Digital Realty Trust (DLR) – With more than 300 data centers across six continents, Digital Realty provides scalable network architectures necessary for AI applications. Its extensive reach makes it a critical player in the AI infrastructure landscape.
  3. Hewlett Packard Enterprise (HPE) – HPE offers comprehensive data-center solutions, including servers, storage, and networking systems tailored to the needs of AI-driven enterprises.
  4. CoreSite Realty Corp. (AMT) – As a unit of American Tower REIT, CoreSite operates high-performance data centers across key North American markets, supporting enterprises and cloud providers with AI and other data-intensive workloads.
  5. NTT Ltd. (NTTYY) – NTT operates over 160 data centers in 20 countries, providing state-of-the-art digital infrastructure. Its global footprint and cutting-edge facilities make it a vital enabler of AI technology.

These companies are not just supporting AI growth—they’re actively shaping the infrastructure upon which AI innovation depends. Their hyperscale data centers are positioned to handle the rising computational and storage demands, ensuring that AI development continues to accelerate.

Investment Implications: Who Really Wins in the AI Gold Rush?

The current AI surge offers a nuanced opportunity for investors. While companies like Nvidia continue to lead in AI innovation, the businesses facilitating the deployment and scaling of AI technology may offer superior long-term growth potential. Investing in these “picks and shovels” of the AI revolution could yield substantial returns as their infrastructure becomes increasingly indispensable to AI’s progress.

These infrastructure players are not just participants in the AI race—they’re the architects of the technological landscape on which AI thrives. As AI systems become more powerful and ubiquitous, the demand for robust, scalable infrastructure will deepen. Investors looking to capitalize on the AI boom should not overlook the foundational companies building and maintaining the systems that power this revolution.

In the high-stakes world of AI advancement, the question for investors is this: Will your portfolio focus on the companies grabbing headlines, or will you invest in the powerhouses building the indispensable infrastructure that makes AI possible?

Conclusion

As AI reshapes industries and Nvidia’s dominance in the AI space continues to grow, data-center providers are positioned to emerge as the backbone of this technological revolution. The hyperscale data-center market is on an explosive growth trajectory, driven by AI’s insatiable demand for computational power. While AI chipmakers like Nvidia dominate the spotlight, investors seeking to capture the full value of the AI boom should look to the companies behind the scenes—the infrastructure providers who are quietly enabling AI’s meteoric rise.

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Latest Market News

Can AI Deliver Real Profits? Key Stats Investors Need to Know

As NVIDIA (Nasdaq: NVDA) prepares to unveil its earnings report, investors are eagerly anticipating insights into the burgeoning world of artificial intelligence (AI). While the technology has captured headlines with its impressive capabilities, the true value of AI lies in its practical applications and the tangible benefits it delivers to businesses.

The AI FOMO Factor: Hype vs. Real Value?

The trillion-dollar question surrounding AI is how much of the current corporate investment is fueled by fear of missing out (FOMO) versus actual, tangible use cases. While hype has driven much of the recent frenzy, several corporate giants have begun to report impressive results stemming from AI deployment, giving investors clues that the sector may have real staying power.

Key CEO Insights on AI Adoption

Several high-profile CEOs have offered compelling evidence that AI is beginning to pay dividends for large enterprises. These examples provide a glimpse into how AI can drive efficiency and generate value on a massive scale.

Amazon: AI Saves 4,500 Developer Years

Amazon (Nasdaq: AMZN) CEO Andy Jassy recently shared a staggering statistic regarding AI’s impact on the company’s operations. According to Jassy, Amazon’s implementation of generative AI has saved an estimated 4,500 developer-years of work. This savings came from a single project involving the upgrade of applications to Java 17, which traditionally would have required 50 developer-days per application but was completed in just a few hours thanks to AI-powered automation.

These efficiency gains are translating into significant cost savings. Jassy estimates the company will save roughly $260 million annually due to AI-driven enhancements. While Amazon promotes its own AI product, Amazon Q, the broader takeaway for investors is clear: companies effectively implementing AI can unlock substantial productivity gains.

Walmart: AI Cuts Headcount Needs by 100X

Walmart (NYSE: WMT) provided another eye-popping example of AI’s impact during a recent earnings call. The retail giant has been using generative AI to enhance the quality of its product catalog, which directly affects everything from customer search experiences to inventory management.

Walmart revealed that generative AI has allowed it to create or improve over 850 million data points within its catalog. Without AI, this task would have required 100 times the current headcount to complete in the same timeframe. Furthermore, Walmart is developing its own large language models and implementing deep learning recommendation models (DRLM) to boost product search capabilities.

For investors, this underscores the efficiency AI brings to companies that manage massive amounts of data—key drivers for future cost savings and profitability gains.

Accenture: AI Bookings Soar 7X in 2024

Accenture (NYSE: ACN) is another company riding the AI wave. The consulting giant reported that its generative AI bookings for 2024 have already surpassed $2 billion, a 7X increase from the $300 million booked in 2023. This explosive growth is expected to continue as clients move beyond experimentation and into full-scale deployment of AI solutions.

Accenture’s CEO Julie Spellman Sweet emphasized that the company is working on numerous pilot projects across its client base, including the National Australia Bank, where it identified 200 AI use cases. Eight of those have already progressed into enterprise-grade pilots. As more pilots transition into broader implementation, Accenture and its clients could see significant cost savings and operational efficiency.

While these examples offer a glimpse into the real-world impact of AI, it’s important to note that the technology is still in its early stages. Many companies are exploring AI applications and experimenting with different use cases. As AI continues to evolve and mature, we can expect to see even more groundbreaking innovations and transformative outcomes.

As NVIDIA prepares to report its earnings, investors will be keenly watching for insights into the company’s AI strategy and the progress it has made in delivering AI-powered solutions to its customers. The success of NVIDIA and other AI leaders will depend on their ability to harness the full potential of this transformative technology and deliver tangible value to businesses and society as a whole.

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Pharma Stocks

Beyond the Obesity Hype: Johnson & Johnson’s Quiet Path to Trillions

While the market’s attention is currently fixated on Eli Lilly’s meteoric rise fueled by its anti-obesity drugs, a pharmaceutical giant is quietly positioning itself for a future of unprecedented growth. Johnson & Johnson (NYSE: JNJ), the world’s largest drugmaker, is poised to join the exclusive trillion-dollar club, offering investors a compelling alternative to the speculative frenzy surrounding Lilly.

Johnson & Johnson’s dominance in the pharmaceutical industry is undeniable. Its 2023 revenue of $85 billion far outpaced its closest competitor, Roche, underscoring its market leadership. Yet, despite this strength, the company’s valuation remains relatively undervalued compared to its peers and historical levels.

While the stock’s valuation isn’t exceptionally cheap, it presents a compelling opportunity for long-term investors. Its enterprise-value-to-EBITDA (EV/EBITDA) ratio, a popular metric for comparing valuations across industries, falls within the range of its pharmaceutical peers. However, when compared to historical levels, Johnson & Johnson’s valuation appears notably attractive.

The recent surge in interest rates has played a significant role in suppressing stock prices across the board. This has created a favorable environment for investors seeking value-oriented investments. While the AI-driven tech rally has inflated valuations in certain sectors, the pharmaceutical industry has largely remained overlooked, providing a potential oasis for discerning investors.

Johnson & Johnson’s valuation is not only attractive but also supported by its robust fundamentals. The company’s diverse product portfolio, coupled with a strong pipeline of innovative treatments, positions it for sustained growth. Its commitment to shareholders, evidenced by a consistent dividend payout, further enhances its appeal.

While the path to a trillion-dollar valuation may be a gradual one, Johnson & Johnson’s solid foundation, coupled with its undervalued status, makes it a compelling investment for long-term investors seeking both growth and stability. As the market continues to evolve, the company’s potential to join the ranks of the most valuable corporations in the world is undeniable.

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Resource Stocks

Copper Surge: 3 Top Mining Stocks Set to Ride the Energy Boom

Copper has become a cornerstone of the global energy transition in 2024, as demand for the metal surges alongside soaring energy needs. Investors focusing on commodities should take note—copper miners are benefiting from this trend, particularly as the copper spot price hovers near record highs. Jacob White, ETF product manager at Sprott Asset Management, believes copper’s expanding role in the energy transition has triggered a new supercycle for the metal. This surge in demand, primarily driven by the growing influence of AI applications and the intensifying power requirements of data centers, places copper at the forefront of critical materials for electrification.

The potential for copper to experience sustained supply shortages only adds to the bullish case for the sector. As the global economy continues to shift towards electrification—through grids, renewable energy systems, and emerging markets—copper miners are stepping up to meet this demand. Below, we explore three copper mining stocks that are well-positioned to capitalize on the boom, each of which is included in the Sprott Copper Miners ESG-Screened UCITS ETF.

Freeport-McMoRan (NYSE: FCX) – The Dominant Player

Freeport-McMoRan stands out as the largest pure-play copper producer globally, with a massive output of 1.3 million tonnes of copper in 2023. With diversified operations spanning North America, South America, and Indonesia, FCX offers geographical flexibility that shields it from regional disruptions. The company’s robust margins and cash flows are bolstered by its impressive pipeline of projects and a staggering 111 billion pounds of copper reserves.

For traders seeking exposure to copper, FCX remains a solid option, primarily due to its liquidity and scale. It is the only publicly traded company producing more than one million tonnes of copper annually while maintaining over 50% exposure to the metal. FCX’s dominance in the copper space, coupled with its strategic diversification, offers a reliable growth story as copper demand accelerates.

Lundin Mining Corporation (Toronto: LUN) – Expanding Through Strategic Acquisitions

Lundin Mining Corporation is another notable player in the copper sector, with operations spread across Argentina, Brazil, Chile, Portugal, Sweden, and the US. The company posted record copper production in 2023, and its outlook for 2024 suggests further growth on the horizon. For investors, the highlight is Lundin’s strategic acquisition moves, particularly its partnership with BHP Group to acquire Filo Mining for $3 billion. This acquisition provides Lundin with a 50% stake in the Filo del Sol copper project, which boasts an estimated 4.5 billion pounds of copper resources.

What’s appealing about Lundin from an investor’s perspective is the company’s ongoing efforts to focus more on pure-play copper operations. The Filo acquisition strengthens Lundin’s position within the sector and indicates management’s intention to capitalize on the growing demand for copper. As the deal is set to close in early 2025, investors could see a positive revaluation of the stock as Lundin’s copper production capabilities expand further.

ERO Copper (Toronto: ERO) – A Junior Miner with Growth Potential

For those willing to take on more risk in exchange for higher potential returns, ERO Copper offers a compelling opportunity. Although still considered a junior producer, ERO has laid the groundwork to become a significant player in the copper market. With all its operations based in Brazil, ERO benefits from Brazil’s clean energy initiatives—91% of the country’s electricity came from renewable sources in 2023.

ERO’s key asset, the Caraíba Operations, features several high-grade copper mines, while the Tucumã Project is expected to double the company’s copper output by 2025. This kind of production growth from a junior miner could result in outsized stock gains, especially as the company positions itself as a low-carbon producer. Additionally, ERO’s involvement in the Xavantina Operations, a gold and silver mining project, offers some diversification for investors who value exposure to precious metals alongside copper.

Key Takeaways for Traders and Investors

Copper’s strategic role in the global energy transition underscores the long-term growth potential for the companies mining the metal. From giants like Freeport-McMoRan, which provide liquidity and scale, to junior miners like ERO Copper that offer high-growth potential, there are multiple ways for investors to gain exposure to the copper supercycle. Lundin Mining’s recent strategic acquisitions also highlight the importance of focusing on pure-play copper investments as demand for the metal intensifies.

While the future remains bright for copper miners, the possibility of supply shortages could further drive prices higher, making it an attractive space for traders and long-term investors alike. However, risks remain, including the potential for geopolitical disruptions and slower-than-expected growth in copper demand. Investors should keep a close eye on copper production forecasts and global infrastructure developments, as these factors will likely play a crucial role in determining the trajectory of copper prices in the coming years.

Conclusion

Copper’s importance to the electrification of the global economy cannot be overstated, and the metal’s supply-demand dynamics suggest further upside potential. Freeport-McMoRan, Lundin Mining, and ERO Copper are three companies positioned to benefit from these trends, offering varying levels of exposure and risk profiles. Whether you seek the stability of a large-cap producer or the growth potential of a junior miner, the copper sector offers numerous opportunities for traders and investors as the energy transition continues to unfold.

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Pharma Stocks

Recursion Pharmaceuticals and Exscientia to Form World’s Largest AI-Powered Biotech

Recursion Pharmaceuticals (NASDAQ: RXRX) and Exscientia (NASDAQ: EXAI) announced their strategic decision to merge on August 8, aiming to create the world’s largest biotech company focused on AI-driven drug development. The merger is projected to close in early 2025, sparking increased bullish sentiment around Recursion’s stock as investors anticipate the potential value this partnership could unlock.

Here’s a closer look at why traders and investors should pay attention to this merger and how it could drive shareholder value in the long term.

Increased Resources and Potential Catalysts Post-Merger

For traders, the merger presents a new layer of opportunity. One of the most notable benefits is that Recursion will inherit Exscientia’s pipeline programs, effectively doubling its chances of successfully bringing a drug to market. In a sector where success often hinges on commercialization, this influx of programs expands Recursion’s revenue-generating potential exponentially.

Both Recursion and Exscientia have previously relied on milestone payments from collaborators to fund their R&D efforts. Post-merger, these companies will share a robust lineup of partnerships, including industry giants like Bayer, Roche, Bristol Myers Squibb, Sanofi, and Nvidia. For traders, the significance of this depth in partnerships is crucial: not only does it provide diversified backing across pharma and tech, but it also mitigates some of the risk associated with being a small-cap biotech.

The combined entity will focus on rare-disease treatments and precision oncology, with an additional focus on infectious diseases. Given that the pipelines of both companies are complementary rather than overlapping, there’s minimal risk of program cuts. From a trader’s perspective, the diversified pipeline opens multiple paths to potential success, each representing a distinct catalyst as new trial results roll out. Management estimates up to 10 major clinical readouts over the next 18 months, including four phase 2 trials, which could offer steady, market-moving news flow.

Leadership Continuity and Financial Stability

Recursion will retain its name and leadership structure, with CEO Chris Gibson continuing to lead the newly combined company, while Exscientia’s interim CEO, David Hallett, will step in as Chief Scientific Officer. Both executives bring significant scientific expertise to the table, positioning the company to continue pushing the boundaries of AI-driven drug discovery. For investors, this leadership continuity provides confidence that Recursion’s strategic direction will remain stable, even as the company scales.

In terms of capital, the merger sets up Recursion for sustained financial strength. The combined entity expects $100 million in cost synergies and will hold approximately $850 million in cash and liquid assets, offering a solid runway through 2027. From a trading perspective, this is significant—Recursion likely won’t need to dilute shareholders or take on additional debt, reducing downside risk related to capital raises or debt servicing.

Risks and Uncertainties Still Linger

Despite the bullish potential, traders must remain mindful of the risks. Both Recursion and Exscientia are operating in relatively untested territory. While the concept of AI-driven drug development is promising, no competitor has yet definitively proven that AI can reliably make drug development faster, cheaper, or more successful than traditional methods. As a result, the efficacy and safety of AI-designed medicines remain under scrutiny.

Moreover, the reliance on numerous high-profile collaborators is a double-edged sword. While having powerful partners signals credibility, the continuation of these partnerships is contingent on positive clinical outcomes. Setbacks could potentially jeopardize these relationships, and it’s uncertain how long big pharma companies will remain committed if the road to commercialization becomes rocky.

For now, the massive war chest of cash, a broad pipeline of drug candidates, and a strong leadership team make Recursion a compelling buy for those with a higher risk tolerance. However, traders should stay vigilant for clinical updates and partnership developments, as these will be critical to sustaining the bullish narrative.

Conclusion

The merger between Recursion and Exscientia positions the newly combined entity to become a dominant force in the AI-powered biotech space. For traders and investors, this merger offers both opportunity and risk. On the upside, the expanded pipeline, strong collaborations, and solid financial footing provide numerous potential catalysts for growth. However, the inherent uncertainty surrounding AI-driven drug discovery warrants caution. Investors with a higher risk tolerance may find it worthwhile to acquire shares early, while keeping a close watch on clinical trial progress and partnership stability.

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Resource Stocks

Gold Mining Stocks Under $15 Offer Inflation Hedge and Strong Dividends

For years, Wall Street has dismissed gold investors as “gold bugs,” mocking their loyalty to an asset class often seen as outdated and lacking utility. Despite this, gold remains one of the most significant financial assets globally, with central banks steadily increasing their reserves. Although renowned investors like Warren Buffett have historically avoided gold, citing its lack of productive value, the metal is now back in focus, offering a compelling investment case as markets grow more volatile.

The Case for Gold as a Strategic Asset

The current case for gold rests on two key factors: its role as a hedge against inflation and the operational diversification of leading mining companies. While spot gold recently surged to record highs, trading above $2,500 per ounce, geopolitical tensions—particularly in the Middle East—pose the potential for a massive breakout. From a trader’s perspective, gold’s technical outlook is bullish, especially if conflict escalates, driving demand for safe-haven assets.

For investors considering exposure to the gold sector, mining companies offer not only the benefits of the metal itself but also additional upside through dividends and diversification into other essential commodities, such as silver, which is vital for industrial applications.

Here’s a closer look at three gold mining stocks that pay attractive dividends, offering both income and potential upside. All three companies are rated “Buy” by top Wall Street firms and trade under $15 per share, making them accessible for a wide range of investors.

B2Gold Corp. (NYSE: BTG)

B2Gold, a Canadian gold miner, operates several key mines in Mali, Namibia, and the Philippines. For traders seeking high returns in the gold sector, B2Gold offers a compelling opportunity, currently paying a robust 6.23% dividend. Its portfolio includes the Fekola Mine in Mali, the Masbate Mine in the Philippines, and the Otjikoto Mine in Namibia, along with stakes in Calibre Mining and BeMetals. This small-cap stock provides diversified exposure across multiple regions, and its exploration assets in Mali, Uzbekistan, and Finland offer additional growth potential. B2Gold’s strategic operations position it well to benefit from rising gold prices and global demand for precious metals.

Caledonia Mining Corp. (NYSEAmerican: CMCL)

Caledonia Mining is another attractive small-cap miner, offering a 5.20% dividend yield. The company’s primary asset is the Blanket Mine in Zimbabwe, where it holds a 64% stake. In addition to this core asset, Caledonia is expanding its operations with 100% ownership of several promising projects, including the Maligreen gold exploration project, the Bilboes gold deposit, and the Motapa exploration property, all located in Zimbabwe. With gross revenues surging 35% year-over-year to $50.1 million in the second quarter of 2024, and gross profit soaring nearly 110% due to increased production and higher gold prices, Caledonia is positioned for continued growth. The stock’s potential for capital appreciation, coupled with its strong dividend, makes it a standout for investors looking for both income and upside in the gold sector.

DRDGold Ltd. (NYSE: DRD)

DRDGold is a South African gold producer specializing in the recovery of metals from tailings—residues left over from previous mining operations. Paying a 5.29% dividend, DRDGold offers a unique angle on the gold market, leveraging its expertise in retreating surface materials to extract value from what might otherwise be waste. Operating primarily in the Witwatersrand basin, DRDGold’s commitment to sustainability and long-term value creation sets it apart from its peers. The company’s focus on generating synergies between financial, human, and environmental resources demonstrates its forward-looking approach, making it a hidden gem for investors seeking both income and a play on gold’s rising prices.

Strategic Considerations for Traders

Gold’s renewed strength amid inflationary pressures and geopolitical risk underscores the importance of precious metals in a diversified portfolio. While gold itself doesn’t generate income, leading mining companies like B2Gold, Caledonia, and DRDGold do, providing traders with a way to hedge against inflation while also benefiting from regular dividends. These companies’ low price points and high yields make them accessible options for those looking to add exposure to gold without sacrificing income potential.

Gold as a Hedge and the Role of ETFs

Beyond individual stocks, traders can also gain exposure to gold through exchange-traded funds (ETFs) like the SPDR Gold Shares ETF (NYSE: GLD). This ETF is one of the most popular ways to invest in gold, with each share representing one-tenth of an ounce of gold. While the fund doesn’t pay a dividend, it allows investors to directly track the price of physical gold, offering an additional layer of diversification for portfolios.

Conclusion

As inflation concerns grow and geopolitical risks rise, gold is increasingly seen as a strategic asset for both long-term investors and active traders. With prices nearing all-time highs, the potential for further gains is strong, especially if the global economic outlook continues to deteriorate. Mining stocks like B2Gold, Caledonia Mining, and DRDGold not only provide exposure to rising gold prices but also offer the added benefit of steady dividend income, making them attractive plays for traders looking to hedge against market volatility.

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Resource Stocks

Agnico Eagle Mines Insiders Cash In: A Red Flag for Investors?

Agnico Eagle Mines Limited (NYSE:AEM) has seen a flurry of insider selling activity in recent months, raising eyebrows among investors. While insider transactions can be a complex indicator, the recent trend at Agnico Eagle is difficult to ignore.

The most significant sale came from Ammar Al-Joundi, CEO, President, and Director, who parted ways with US$12 million worth of shares at an average price of US$68.65. This transaction, representing 55% of his total stake, is particularly noteworthy given that the stock price has since climbed to US$76.73. While it’s essential to approach insider trading with caution, such a substantial sale by a company’s top executive can often signal waning confidence in the stock’s future performance.

Over the past year, Agnico Eagle Mines insiders have sold significantly more shares than they have purchased. Although CEO Al-Joundi was also the largest buyer, acquiring US$7.6 million worth of stock, the overall trend is tilted towards selling. This discrepancy between buying and selling activity is a red flag that investors should pay close attention to.

While insider ownership at Agnico Eagle Mines stands at a modest 0.1%, representing approximately US$45 million in shares, it’s still below the levels often associated with strong alignment between management and shareholders. The combination of limited insider ownership and recent selling activity raises questions about the extent to which insiders are truly invested in the company’s long-term success.

Key Takeaways

  • Agnico Eagle Mines insiders have been net sellers over the past year.
  • The most significant sale came from CEO Ammar Al-Joundi, who offloaded a substantial portion of his holdings.
  • Insider ownership at Agnico Eagle Mines is relatively low.
  • Investors should approach the stock with caution given the insider selling activity.

Conclusion

While insider trading should never be the sole factor driving investment decisions, the recent trend at Agnico Eagle Mines warrants careful consideration. The significant insider selling, coupled with relatively low insider ownership, suggests a potential lack of alignment between management and shareholders. Investors would be wise to conduct thorough due diligence before making any investment decisions and to remain vigilant for further developments regarding insider transactions.