Finding high-growth stocks to buy that not only have strong fundamentals that support their investment thesis over the long term, but also excellent technical fundamentals that support their near- and medium-term outlooks is not easy.
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Sibanye Stillwater (SBSW), Nexa Resources (NEXA), and Aura Minerals (AUGO) are all commodity miners with explosive projected earnings growth: Sibanye projects 692% EPS growth as South Africa’s gold and platinum producer trades at 3.31 forward P/E, Nexa at 3.31 forward P/E, Nexa at 9% EPS growth at 9%. 6.88 forward P/E, and Aura projects 350.95% EPS growth at a 6.98 forward P/E as a gold and copper mine in Brazil, Mexico and Honduras.
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Gold prices are above $2,800/oz and increased demand for battery metals from electrification and AI infrastructure development is driving margin expansion and earnings acceleration at these mining companies.
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Personally, I am not necessarily a short-term investor, although I have made what some call “swing trades” in the past. Instead, I focus on long-term investing, buying stocks with the goal of holding for at least a decade (or three, hopefully). In that sense, I may not be the best person to “test the tape” or near-term techniques for any given stock, but I’ll give it a try.
READ: The analyst named NVIDIA in 2010 Just naming his top 10 AI stocks
To me, these three growth stocks have the right mix of near-, medium- and long-term fundamentals that scream buy. Let’s dive in.
For those looking for gold mining with explosive income potential, Sibanye Stillwater (NYSE:SBSW) looks like a great pick right now.
Sibani is South Africa’s leading gold mine that focuses on producing not only gold, but platinum. These two metals have been on an absolute tear of late, and so has SBSW stock. More than 230% compared to last year, it is clear that investors are looking for international connections for gold, and the best users in this area. I would argue that Sibani may give most companies in this sector a run for their money.
With this stock holding up to its 50-day moving average as trading volume has picked up, it’s a sign to me that some classic rally is coming before the stock takes another leg up. I don’t know what Siban will get there. This could be due to the ongoing geopolitical conflict and flight to safety as gold prices rise, or investors increasingly focus on companies’ balance sheets and fundamentals.
In any case, I think investors are in good hands. With strong Q4 results highlighted by operating margins that expanded as a result of cost discipline in a high commodity price environment, I would argue that the medium and long-term outlook for Sibani remains strong. This is a solid buy in my opinion, and a stock I have near the top of my watch list right now.
I’m sticking with the commodity trend in this area (and my next pick will be no different). He said, I am a fan Nexa Resources (NYSE:NEXA) right now, for the same reasons as Sibani.
Now, Nexa is another company in the sense that the company is focused on mining zinc and other metals in Latin America. As such, it’s more of a battery mineral that I suggest is more closely related to the electrification trends we’re seeing, as well as the rise of AI.
It’s not too bad, however. And with strong fundamentals (the company recently posted EPS that rose more than 2,000% year-over-year, beating high expectations), this is a stock that’s firing on all cylinders. As margins continue to expand due to strong demand for zinc led by EVs and renewables demand globally, Nexa has raised its forward guidance to nearly 100% EPS growth next year.
Given how far Nexa has come, and how strong the near- and medium-term outlook is for the company’s key mining minerals, this is a stock I don’t think investors want to sleep on right now.
Finally, we have a gold prospector on steroids Aura Minerals (NASDAQ: AUGO). The company is one of the leading gold miners in Brazil, Mexico and Honduras. These are markets that are generally seen as somewhat predictable from a geopolitical risk perspective, but actually have a strong history of favorable mining regulations and governments that are attractive to companies that create jobs and economic value at home. In this regard, I think Aura has a lot to offer in the long run.
Of course, that doesn’t say anything about rising gold prices, which remain above $5,000 per ounce. With recent price action (AUGO stock is up more than 200% over the past year), there is plenty of momentum for traders to highlight the reasons to own this stock.
I think the company’s strong fundamentals, positioned Aura to rise significantly over time by around 350% year-over-year, are highlighted by EPS growth. That is, if the company can maintain its margins and operating model for the long term.
Currently, I see no signs that this will not be the case going forward. So, for those who are high on gold prices, I don’t think it’s worth waiting for this particular name.
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