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Prediction: These Could Be the Best-Performing Value Stocks Through 2030

Growth from coins
Image source: Getty Images

Written by Amy Legate-Wolfe at The Motley Fool Canada

Canadian investors are likely looking at the market not knowing where to turn right now. Meme stock trends are rising once more. Volatility is prevalent even among the gold markets. And with an election in the United States this November, nothing looks certain.

Yet there is one area that should be one of the best-performing sectors through to 2030. At least! What’s more, this area provides a slew of value stocks that investors should certainly consider on the TSX today.

Copper stocks

If you’re looking for growth and value, copper stocks are certainly the place to look. Copper is a vital component in various industries such as construction, electronics, and renewable energy. As the global economy continues to grow, particularly in emerging markets where infrastructure development is booming, the demand for copper is likely to remain strong.

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Many countries are investing heavily in infrastructure projects to stimulate economic growth and enhance competitiveness. Copper is a fundamental material in building infrastructure, from roads and bridges to telecommunications networks and electrical grids. As governments allocate funds for such projects, the demand for copper is expected to rise, benefiting copper producers.

What’s more, the shift towards renewable energy sources like solar and wind power requires significant amounts of copper. Solar panels, wind turbines, and electric vehicles all rely on copper for their wiring and electrical systems. With the global push for decarbonization and the electrification of transportation, the demand for copper is projected to increase substantially in the coming years.

Supply is down

However, despite its widespread use, copper production faces challenges such as declining ore grades, resource depletion, and environmental regulations. Developing new copper mines and expanding existing ones requires substantial investment and time, often facing logistical and regulatory hurdles. This could lead to supply constraints in the future, potentially driving up prices and benefiting existing copper producers.

This has been the case recently. When demand is up, the price rises. Yet when demand drops even slightly, it can dip. China, the world’s biggest consumer of copper, has seen a slowdown in its economy, particularly in the construction and manufacturing sectors. This means there’s less demand for copper, which drives the price down.

Furthermore, the United States dollar has been getting stronger recently. This makes copper more expensive for countries that use other currencies to buy it. As a result, some buyers are waiting on the sidelines for prices to come down.

Value abounds

Yet long term, with copper used for just about everything, now is a great time to get in on copper stocks. In particular, there are two copper stocks I would consider if you’re looking for value in share price, as well as financial performance.

Lundin Mining (TSX:LUN) is a major copper producer with a strong track record and promising expansion plans. Shares dropped 10% with the drop in copper prices, providing an excellent entry point. It also currently trades at just 1.9 times book value, providing strong value as well.

Another strong option, especially for diversified assets, is Teck Resources (TSX:TECK.B). Teck is the largest mining company in Canada by market capitalization. The company’s main focus is on metals like copper, zinc, and steelmaking coal. Teck also produces some gold, molybdenum, and other products. Teck stock currently trades at just 1.4 times book value, again with a strong entry point. So if you’re interested in long-term growth that should surge through 2030 and beyond, consider these copper stocks today.

The post Prediction: These Could Be the Best-Performing Value Stocks Through 2030 appeared first on The Motley Fool Canada.

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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

2024