Shares of This Canadian Miner Jumped 17% Last Month

This Canadian miner grew in January, only to fall in February. What’s been going on, and should investors seek this as a chance to buy in bulk?

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published February 27, 2023 8:30 pm EST

Canadian miner Ivanhoe Mines (TSX: IVN) jumped almost 17% in January, with shares climbing higher and higher, until they didn’t.

Since then, shares of the miner have come down by 12%. So, what’s going on with Ivanhoe stock, and should investors seek this as an opportunity or a warning?

People walk into a dark underground mine. — Source: Getty Images

First, the jump

So, why did Ivanhoe stock jump in the first place? At the beginning of 2023, the Canadian miner came out with a number of updates on its mines around the world. Pretty much every single thing was positive.

In particular, Ivanhoe stock focused in on the copper production, which management touted as “essential for the energy transition.” It continues to expand several of its mines, with one mine alone ranked as the fourth-largest copper producer globally for 2025. Its mineral reserves tonnage increased by 101% to 472 tonnes, with costs only going down.

Clearly, this caused a large jump for the company that remained quite strong throughout the first month of 2023. Yet in the last few weeks, shares have gone down. The question is, why?

No clear answer

Management was recently asked why there could be a decline in share price, and their response was basically, “Beats me!” There didn’t seem to be any company-specific reason, management said in a statement, as to why there would be such a decline in share price.

Now, earnings are around the corner, due out Mar. 13. So, the question becomes whether investors should see this movement as an opportunity or not.

In my view, I would see it as a significant opportunity to jump on the stock before earnings. It seems as though all this guidance points to a strong report coming out in March. This could lead to another jump in share price. Hopefully, this time the jump will be more sustained.

That being said, I wouldn’t say you’re getting a steal at this point. Ivanhoe stock trades at 24.82 times earnings as of writing. It also doesn’t have a dividend yield, so you’re not being paid to wait for growth. In that sense, it’s a difficult time to get in on the Canadian miner for some real stability.

Considerations

What investors should consider here are a few things. First, how much risk can your portfolio handle at this point in time? If you already have a few mineral stocks or riskier choices, then I would certainly stay away from the stock for now.

However, if you’re looking for an entrance into a long-term hold within the copper industry, this could be an excellent choice. As production increases, so too will demand for copper. As management mentioned, copper is certainly of major importance during the energy transition. Further, shares have climbed about 170% in the last decade alone. We could certainly see that again as well.

Altogether, while you won’t get a dividend, you could see some major growth from this Canadian miner in the next decade to come. As it continues to grow, and copper remains in demand, Ivanhoe stock could be a solid choice as part of your risk portfolio.