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Energy & mining stocks

Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.

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Question asked

Energy & mining stocks

Hi team, With energy and commodities stocks taking a beating at moment does Market Matters consider it still early to buy the dip? I am interested in MIN FMG S32 PLS WHC particularly. Keep up the good work. Cheers. John

Answer

Hi John,

Another well timed question as this week has been a pivotal time in a number of resource sub-sectors with uranium and lithium stocks enjoying explosive rallies on Wednesday and Thursday on macro news. We have spoken on the stocks you highlighted a few times over recent weeks:

  • We like lithium stocks such as PLS and especially MIN into weakness, especially due to their large short positions but caution about chasing them into strength after their bounce ~20% this week.
  • We like FMG as a yield play around $16 but largely anticipate some consolidation of recent weakness into Christmas.
  • We like diversified resources stocks such as S32 at current levels having added to our BHP position in September.
  • We like coal miner WHC into current weakness but it has yet to enjoy the bounce that has washed through other resource sectors.

In short, we think you are on the right track looking at these stocks.

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South32 Ltd (S32)
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