Turquoise Hill Resources: Catalysts Align In Its Favor www.seekingalpha.com
Since early June Turquoise Hill Resources (NYSE:TRQ) has been on a tear, as the stock has jumped from below $2.50 to $3.07 on July 25. This looks like the first time since the commodity super cycle hit a ceiling in early 2013 that a sustainable rebound is at hand. Copper started to slowly drop as early as 2011.
The giant economies of Europe and China are no longer putting downward pressure on copper as the global economic recovery remains in full swing. From earnings reports it suggests mining and materials stocks are entering a momentum phase.
One of several reasons I draw that conclusion was the way Freeport-McMorRan (NYSE:FCX) soared after its earnings report, where the company jumped 15 percent for the day. That was after failing to meet earnings expectations. But solid revenue and optimistic guidance gave the market what it wanted to hear, and the share price of Freeport upward momentum.
Turquoise Hill has its earnings report coming up in a few days, and I think it's going to continue to be rewarded from the recovery in copper prices.
Copper prices
Not too long ago copper was getting a temporary boost from what the market was calling the "Trump trade," a reference to his stated plans to build out and improve infrastructure in the U.S. That has changed to an improving outlook for China's economy, which of course plays directly into the benefit of Turquoise Hills and its Oyu Tolgoi flagship mine, which has China as its primary customer.
Published Date:2017-07-28