NEW YORK ( TheStreet) -- The world's top 40 miners achieved combined net profit of $110 billion in 2010, according to a PricewaterhouseCoopers Mine 2011 report. These miners have managed to slash their debt by half and have built cash reserves of $105 billion. Moreover, they have announced capital expenditure of $300 billion for 2011.
In the first half of 2011, 1,379 mining M&A deals worth $71 billion were announced globally, according to a PwC report. On average, the deal value stood at $104 million, 40% higher than the year-ago period. With volatile global markets putting downward pressures on mining valuations for remaining part of 2011, deal activity is foreseen to slowdown. Despite the expected slowdown in deals during the second half of 2011, demand for metals from China and other emerging nations will drive the sector's long-term fundamentals. Also, factors like an average mining company recording all-time low debt levels and high cash flow and profitability levels would support industry growth.
Based on latest quarterly results and strong analysts' buy, hold recommendations for attractive future returns, these seven mining stocks have potential upsides ranging from 18% to 54%. The average buy recommendation for these stocks is 63%, while average hold rating is 33%, based on a Bloomberg consensus.
The stocks are arranged in ascending order of potential upside.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV