Capstone Copper (TSX:CS) is a Vancouver-based commodities stock focusing on copper mining. This company owns and operates 70% of the Mantoverde copper-gold mine in the Atacama region, Chile; the Cozamin copper-silver mine of Zacatecas, Mexico; the Mantos Blancos copper-silver mine in the Antofagasta region, Chile; and the Pinto Valley copper mine in Arizona, U.S.
Most investors may have seen the surge in commodities prices of late. Copper has certainly not been immune to these moves. Accordingly, for a company like Capstone looking to unlock transformational copper production growth and executing operational and cost improvements, this is a good time to be an investor.
Let’s take a look at why Capstone may be an interesting portfolio addition right now.
This commodities stock is the place to be
Copper is one of the more interesting metals to consider. Many analysts on Wall Street follow copper closely due to this metal’s nature. Like other metals, copper is seen as a store of value. However, most of this value comes from the industrial value copper provides, particularly in home construction.
Thus, copper is often viewed as a leading economic indicator. In good times, copper surges, as demand outpaces supply. The same works in reverse.
In rising inflationary times, such as these, copper has outperformed. Additionally, as demand for clean energy continues higher, copper happens to be a central component in many clean energy processes. Thus, there’s a long-term growth story behind this metal.
Miners such as Capstone Copper are certainly worth considering for those bullish on copper. This commodities stock is one of the best growers in this space, with excellent fundamentals and a strong balance sheet.
These returns are impressive
Given the aforementioned catalysts, it’s perhaps no surprise to many investors to see Capstone stock absolutely surging of late. This stock is up approximately 45% year over year and has provided investors with significant returns over the long term. Despite a rather volatile chart, Capstone is one of the miners many look to in times like these.
Thus, for those who think this inflation story is far from over, Capstone may be an interesting defensive option right now. Of course, a reversion toward a longer-term mean is possible. However, this is a stock I think is certainly worth a peek, as the company continues to increase production capacity via mergers and acquisitions.
Last year, the consolidated copper production of Capstone stood at 85,000 tonnes, finishing at the upper end of the guidance range of 79,000 to 86,000 tonnes. For this year, the company anticipates producing copper somewhere between 82,000 and 90,000 tonnes.
Bottom line
Overall, Capstone Copper is a stock I think may have more room to run. Despite trading near all-time highs at the time of writing, this is a company with tremendous momentum for a reason.
Right now, there are few growth options to consider in this market. However, Capstone Copper is certainly a commodities stock worth checking out for those who don’t know where to look.
