9 Mining and Metals Stocks to Sell

By
A A A

There's a lot of talk about inflation in the works after the latest round of "quantitative easing" by the Federal Reserve. Printing $600 billion in cash is likely going to devalue the dollar and drive up inflationary pressure. But if you think that means you can just buy into commodity stocks - that is oil, gold, steel and ag companies - you're mistaken. The bottom line is that inflation will only help the bottom line of a select group of companies. Others will suffer from higher costs, lower margins or just plain old poor management.

To help you maximize your inflation investments, here are nine metal and mining stocks you should avoid. Despite inflationary pressure on commodity prices, these miners have dug themselves too deep a hole to be good investments in 2011.

Posco ( PKX )

Based in Korea, Posco (NYSE: PKX ) is an integrated steel producer that produced approximately 31.7 million tons of crude steel in 2009.  2010 has been a forgettable year for PKX, as the stock is down 23.5% year to date.  More recently, this mining stock has dropped 12% since Oct. 1.  Posco also had some distressing numbers in its last income statement, as the company reported a quarterly revenue growth of 14.8%, year-over-year.  Priced at $100.34, PKX stock is down over $40 from its 52-week high.

Companhia Siderurgica Nacional ( SID )

Campanhia Siderurgica Nacional (NYSE: SID ) is an integrated steel producer operating in Brazil and Latin America. Its three operating segments are steel, mining and logistics.  Since mid-April, this stock has fallen 17.6%, and SID is down 4.6% over the past 12 months.  Recently, Zacks Investment Research downgraded SID stock to "underperforming" from neutral.  In its last earnings report, SID announced that it missed earnings estimate by 31%.  Currently trading at $16.90, SID is definitely a mining stock to avoid right now.

Alcoa ( AA )

Based in Pittsburgh, Alcoa (NYSE: AA ) produces and manages primary aluminum, fabricated aluminum and alumina combined.  Year-to-date Alcoa has lost 17.4% of its stock price.  The bad news continues as AA reported that earnings dropped 20.8% year-over-year, in its last financial statement.  Additionally, BMO Capital Markets recently downgraded its position in AA based on the demand for aluminum in American and foreign markets. Alcoa stock may only cost $13.36, but it should still be sold at this time.

Sterlite Industries ( SLT )

Sterlite Industries (NYSE: SLT ) is a non-ferrous metals and mining company that operates extensively in the United Arab Emirates.  Since January, this stock has dropped -14%, compared to gains by the broader markets.  Another unsavory statistic coming from SLT's last income statement is its quarterly revenue, which was reported as dropping 0.4% from the year-earlier period.  While the stock may have rebounded slightly since September, SLT dropped nearly 4% last week alone.

Kinross Gold ( KGC )

Headquartered in Toronto, Kinross Gold (NYSE: KGC ) is involved with the exploration and acquisition of gold-bearing properties, as well as a wide variety of other mining activities. 2010 has been an up-and-down year for KGC, and overall the stock is down 2.5% year-to-date.  Since Oct. 1, the stock has lost 4.5%.  On the earnings front, analysts have scaled back slightly on their estimates for next quarter at 15 cents, after the company posted an actual EPS of 16 cents last quarter.

Aluminum Corp. of China (ACH)

As its name suggests, Aluminum Corp. of China (NYSE: ACH ) is an aluminum company with operations bauxite mining, alumina refining, primary aluminum smelting and aluminum fabrication.  Year-to-date, ACH stock has slid 15.7%, compared to small gains by the broader markets.  More recently, the mining stock is down 3.5% since the beginning of October.  Trading at $22.95, ACH is down from its 52-week high of $34.27.

Nucor Corp. (NUE)

Nucor Corp. (NYSE: NUE ) manufactures steel and steel products, and rounds out the list of top mining stocks to sell.  Since January, NUE stock is down 18.4%.  The stock has leveled off lately, but is still underperforming.  Since Oct. 1, NUE is down 0.4%.  Last quarter, Nucor also missed its earnings estimates by 36.4%.  Trading at $38.07, Nucor is less than $3 above its 52-week low of $35.71.  Sell this mining stock now.

As of this writing, Louis Navellier did not own a position in any of the stocks named here.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: AA , KGC , PKX , SID , SLT

Louis Navellier

Louis Navellier

More from Louis Navellier:

Related Videos

Russell’s One Good Reason
Russell’s One Good Reason           
Tammy’s One Good Reason
Tammy’s One Good Reason             
Lisa’s One Good Reason
Lisa’s One Good Reason              

Stocks

Referenced

Most Active by Volume

87,324,760
  • $7.31 ▲ 22.04%
79,329,227
  • $17.16 ▲ 0.76%
74,153,988
  • $8.87 ▼ 5.84%
49,177,672
  • $34.01 ▲ 4.39%
44,197,901
  • $101.40 ▲ 1.38%
43,197,735
  • $11.70 ▲ 3.36%
42,712,021
  • $74.99 ▲ 1.19%
42,423,171
  • $108 ▲ 0.95%
As of 10/31/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com