NEW YORK (TheStreet) -- Steel Dynamics (STLD), James River Coal (JRCC), Ternium (TX), Walter Energy (WLT), Teck Resources (TCK), Freeport-McMoRan Copper & Gold (FCX), POSCO (PKX), Cliffs Natural Resources (CLF), Rio Tinto (RIO) and Vale (VALE) are a few mining-related stocks trading at deep discounts. The stocks have upside potential of 21%-50%, based on analysts' consensus estimates of 12-month price targets.
A sharp demand for commodities, underpinned by the economic recovery, has sparked off a rally in metal prices, which augurs well for mining stocks. The SPDR S&P Metals and Mining ETF (XME) outperformed broader markets, surging 26% during the last one year, while the S&P 500 Index gained 15% in the same period.
The following 10 mining stocks are trading at price-to-projected earnings of less than 11 and received average analysts' buy ratings of 81%. The selected stocks have potential to deliver up to 50% return over the next one year.
Even though Metalico (MEA), Eldorado Gold (EGO), Royal Gold (RGLD) and Kinross Gold (KGC) are expected to return in excess of 30% in the next one year, we did not consider them as they are trading at an average price-to-projected earnings of around 26.The stocks are stacked from cheap to cheapest based on forward earnings multiples.
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