3 Undervalued Mining Stocks

Mining and energy stocks have plummeted in value over the past two years - but Morningstar analysts reveal there are some companies that are undervalued

Emma Wall 23 December, 2013 | 9:39AM
Facebook Twitter LinkedIn

Gold, metals and commodities have been the worst performing sectors this year, with the Euromoney Global Gold index losing 52% of its value since January. 

The energy sector may not have fared as poorly in 2013, but over the last three years while other sectors have bounced up to 40%, energy has only returned 2%.

Among these languishing indices there are some undervalued gems. According to Morningstar analysts stocks with a one or two star rating are trading at less than their true value. We highlight three companies from the energy and mining sectors which may be undervalued below.

BHP Billiton (BLT)

Star Rating:

BHP Billiton is a diversified miner that supplies aluminum, coal, copper, iron ore, mineral sands, oil, gas, nickel, diamonds, uranium, and silver. A 2001 dual-listed merger of BHP Limited and Billiton PLC created the present-day BHP Billiton. The two operate as separate firms but are overseen by the same board and management team. Shareholders in each company have equivalent economic and voting rights in BHP as a whole.

Rio Tinto (RIO)

Star Rating:

Rio Tinto searches for and extracts a variety of minerals worldwide, with the heaviest concentrations in North America and Australia. Major products include aluminum, copper, diamonds, energy products, gold, industrial minerals, and iron ore. The 1995 merger of RTZ and CRA, via a dual-listed structure, created the present-day company. The two operate as a single business entity. Shareholders in each company have equivalent economic and voting rights in Rio as a whole.

Tullow Oil (TLW)

Star Rating:

London-based Tullow Oil is an independent oil and gas producer that targets oil in underexplored areas of the world. The company focuses largely on Africa; the firm’s key assets/acreage are located in Ghana, Kenya, and Uganda. Beyond Africa, the company is also active in South America (Suriname, French Guiana) and the Norwegian portion of the North and Barents Seas.

Research and analysis via Morningstar Direct

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Rio Tinto PLC Registered Shares4,668.00 GBX-0.53Rating
Tullow Oil PLC19.64 GBX-6.48

About Author

Emma Wall  is former Senior International Editor for Morningstar

© Copyright 2024 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Modern Slavery Statement        Cookie Settings        Disclosures