S&P 500 ^GSPC 5,306.04 +0.02%
Nvidia NVDA $1,140.59 +7.13%
Tesla TSLA $176.75 -1.39%
Alphabet GOOG $178.02 +0.96%
Amazon AMZN $182.15 +0.77%
Meta META $479.92 +0.36%
Microsoft MSFT $430.32 +0.04%
Apple AAPL $189.99 +0.01%

3 stocks from the commodities sector that are undervalued by up to 30%

Jessie Ramsdale
22. 4. 2024
4 min read

Today, we focus on three industrial companies that dominate the market for key raw materials necessary for technological development and energy transformation. These companies are not only successfully facing global economic challenges and changing market dynamics, but are also actively shaping the future of sustainability through billions of dollars of investment in cleaner mining technologies and innovative projects.

Strategic expansion into new areas and significant capacity increases are positioning them at the forefront of the sector, which can provide significant opportunities for investors seeking stability and growth.

Vale S.A .$VALE-1.9%

Vale is one of the world's leading producers of iron orewhich plays a key role in the global rail industry. In 2023, the company reported strong financial results despite a decline in iron ore prices caused by slowing demand from China. Despite this, Vale managed to record an increase in revenues, with its earnings in the last quarter of 2023 increasing by 9 % to US$13 billion compared to the previous year, demonstrating the efficiency of its operations and its ability to optimise costs even in challenging market conditions.

VALE

Vale S.A.

VALE
$12.36 -$0.24 -1.90%
Fair Price: $72.87
Fomgfn: 43.92%
Undervalued
Overvalued
Dostupné pouze členům Bulios Black

Vale not only strives to increase production and efficiency, but also to reduce the environmental impact of its operations. The company announced that its projects to reduce CO2 emissions emissions and restoration of affected areas are proceeding on schedule, which includes a $2 billion investment in environmental and sustainability initiatives through 2030. This strategy not only improves the company's corporate image, but also enhances its competitiveness, with an increasing emphasis on sustainable practices.

VALE

Vale S.A.

VALE
$12.36 -$0.24 -1.90%
Target Price
20.75 (+67.88% Upside)

Vale is also implementing innovative technologies to improve the safety and efficiency of its mining operations. In recent years, the company has introduced automated mining systems that have helped increase iron ore production while reducing costs and risks to workers. In 2023, these technologies have enabled Vale to increase its overall production by 7%. to a record 320 million tonnes, cementing the company's position as one of the largest players in iron ore mining.

BHP Group Ltd $BHP+0.1%

BHP Group, one of the world's largest mining companies, is renowned for its ability to efficiently manage and operate large-scale mining and processing operations in various parts of the world. In the first quarter of this year, the company reported an increase in revenue to $41.7 billion, representing 8.7% increase from the previous year. This financial success is the result of increased production in their key commodity sectors such as copper, iron ore and coal, which benefited from higher global demand and improved market prices.

BHP
$59.60 -$0.03 -0.05%
Fair Price: $90.44
Muqspd: 1.54%
Undervalued
Overvalued
Dostupné pouze členům Bulios Black

BHP is also investing heavily in sustainable technologies and projects, in line with its commitment to environmental sustainability and reducing its carbon footprint. The company has announced that it plans to invest more than 4 billion USD 4 billion in renewable energy projects and emissions reduction technologies over the next five years. These investments include the development of new methods mining and materials processing that minimise environmental impact, such as water recycling systems and energy-efficient mining equipment.

BHP
$59.60 -$0.03 -0.05%
Target Price
46.73 (-21.59% Downside)

In addition, BHP is expanding its operations into new areas such as mining nickel and potashwhich are key to the global energy transition and the agricultural sector. In 2023, the company started production at a new potash project in Canada with an expected annual capacity of 4 million tonnes, which will strengthen its position with these strategic raw materials.

Sociedad Química y Minera de Chile $SQM+0.3%

Sociedad Química y Minera de Chile, the world's leading producer of lithium and other important industrial chemicals, is strategically positioned to take advantage of the growing emphasis on clean energy technologies, particularly in the electric vehicles. The company reported a significant decline in revenue in 2023, but analysts expect growth in the coming years.

SQM
$49.61 $0.16 +0.32%
Fair Price: $72.51
Pvlvwr: 0.57%
Undervalued
Overvalued
Dostupné pouze členům Bulios Black

SQM is also investing in expanding its lithium production capacity and other strategic minerals, to maintain its competitive position. The company plans to expand its lithium production capacity in Chile to 180,000 tonnes per year by the end of 2024, which is almost double from the current 100,000 tonnes. This expansion includes an investment of approximately US$400 million to focus on technological innovation and improving the environmental sustainability of its production processes.

SQM
$49.61 $0.16 +0.32%
Target Price
115 (+131.81% Upside)

In addition to its lithium operations, SQM also produces iodine and potassium salts, which are commodities whose markets are also trending upwards. In 2023, the company recorded 15% growth iodine production, reaching 14,000 tonnes, as a result of improving the efficiency of their operations and expanding market share. This product diversification allows SQM to reduce the risk of dependence on one sector while capitalizing on opportunities in different industries, making it one of the most dynamic commodity companies.

Disclaimer: There is a lot of inspiration to be found on Bulios, but stock selection and portfolio construction is up to you, so always conduct a thorough analysis of your own.

Source.

Read the full article for free?
Go ahead 👇

Log in to Bulios

Log in and follow your favorite stocks, create a portfolio and discuss with others


Don't have an account? Join us

Pass the article on, or save it for later.