Happy New Year, Fools! With a fairly strong year of gains now in the rear-view, all sights are set on whether last year’s strength can continue, as rates look to retreat and a recession looks to be avoided. Indeed, investors are hoping for rate cuts, but just how many of the cuts are already priced into the markets? That’s the big question. At this juncture, investors shouldn’t get far too ahead of themselves after the U.S. stock market’s upward surge to end the year.
At the same time, investors need not go into panic mode by hitting the sell button this January 2024. Though investor sentiment seems to be skewing towards greed rather than fear, I’d argue that a value-based approach can still do well for new investors over the long haul. So, whether or not 2024 turns out to be another spectacular year, here are two intriguing value plays within the mining and materials universe.
Without further ado, let’s check out shares of agricultural commodity producer Nutrien (TSX:NTR) and uranium miner Cameco (TSX:CCO). Shares have been moving in opposing directions of late. But for 2024, I see them as shining gems that value hunters may wish to unearth.
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Nutrien
Nutrien is a great company that’s in the midst of a horrid multi-year descent. Undoubtedly, the stock probably should have never gone parabolic, surging above $140 per share back in the early part of 2022. Though the spike in gains has since been given back (and then some), I view Nutrien as one of the few falling knives on the TSX Index worth reaching for, as long as you’ve got a long-term investment horizon and a stomach of steel. Indeed, choppy moves could continue through 2024. But to pad the turbulence, there’s a fantastic 3.75% dividend yield.
Additionally, some analysts are upbeat on where potash (one of the major commodities Nutrien mines) could be headed next. If potash prices are ready to pop, Nutrien stock looks way too cheap at less than $75 per share and 12.83 times trailing price to earnings.
Finally, let’s not forget about the rising global population. More people means more food. And with that, calls for higher crop yields. Higher crop yields are where Nutrien really shines. Either case, I view NTR stock as a great long-term investment for income-seeking investors seeking greater portfolio diversification and value.
Cameco
Cameco is one of the hottest commodity producers of 2023. The stock surged almost 87% on the year. And though momentum has slowed pace, with a slight 8% dip in late December, I think the pullback is more than buyable for investors who may have missed last year’s euphoric surge.
Though there’s a lot of hype surrounding the “nuclear power renaissance,” I believe Cameco’s impressive market position makes it more than worth the premium price of admission. Further, I think uranium prices could have additional runway as nuclear power begins to be viewed more favourably by the masses.
As the world continues to embrace nuclear power as a clean option, I think Cameco may still have more days, just like in 2023. Though 2024 is likelier to be a more muted year, I would view any dips as great buying opportunities. Cameco’s a well-run miner, and it’s finally feeling some wind at its back!
