MM dipped its toe back into the copper market yesterday when we bought OZ Minerals (OZL) following its 40% correction, the Global X Copper Miners ETF (COPX US) isn’t too far behind having slipped -35% and it’s very much back on our radar. At this stage, we are going to be patient after the commodity continues to struggle but we are conscious that stocks usually reach a low before their underlying commodity – it’s on our Hit List.
This view aligns with our thoughts towards OZL when we only allocated 4% into the position on Tuesday affording us the flexibility to add at lower levels if we see recession fears take a tighter grip on equities. OZL, will like the sector follow the copper price but for the first time in years, arguably the world’s best copper play is trading below our fair value for the miner implying there is some buffer entering the sector for buyers.
NB This ETF holds a smorgasbord of international copper exposure including Glencore, Grupo Mexico, Teck Resources, BHP and OZ Minerals.
MM likes COPX ETF into further weakness
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