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High-Beta Metal Top Picks: Update

Two of our May 17 picks have outperformed the S&P 500. We have turned bearish on some and remain bullish others.

NEW YORK (TheStreet) -- It has been two weeks since we published the article profiling six high-beta metal stocks. With the S&P 500 swinging rather wildly owing to the global action over this period, we felt it was time to take stock of our picks and review them in light of the current scenario.

During the last two weeks, starting May 17, the S&P 500 lost 6%. As a result, even though our pick

Teck Resources


remained flat over this period; it outperformed the index by a fair amount. If we exclude yesterday's performance from our analysis, the stock has increased 6% as against a 4% drop in the S&P 500. We continue to remain bullish on this stock. During this time, eight brokerages rated the stock either a buy or an outperform with a target price ranging between $44 and $52.

Freeport-McMoRan Copper & Gold

(FCX) - Get Report

also outperformed the index, declining only 2% during the last two weeks. Excluding yesterday's performance, the stock gained 3.0%.

On May 22, the company announced that its $1.8 billion Tenke mine in Congo is exceeding its 2010 production targets. We maintain a bullish view on the stock as it may benefit from an upside in the index. Recently, BMO Capital Markets and RBC Capital Markets assigned an outperform rating to the stock with a price target of $110 and $90, respectively.


Century Aluminum

(CENX) - Get Report

plummeted 16%, thereby underperforming the index. The stock primarily moves in line with aluminum prices. However, during the period under review, the metal's prices within three-month delivery on the London Metal Exchange have remained almost flat. This suggests that the stock may have been oversold with no fundamental reason behind the dip.

We reckon that aluminum prices are poised to increase in the near term, as reflected in our

bullish view

on the metal. Furthermore, on May 28, BMO Capital Markets rated the stock a marker performer with a price target of $15.

TheStreet Recommends

Stillwater Mining


, the Palladium producer, lost 16% as well, following an 11% decline in spot Palladium prices, thereby presenting a

strong buying opportunity


Early last week,

Norilsk Nickel

, the world's largest producer of nickel and palladium, announced plans to sell its 51.3% stake in Stillwater in a move aimed at streamlining foreign operations.

Steel makers,


(MT) - Get Report


United States Steel

(X) - Get Report

shed 10% and 14%, respectively, during the period. We reckon the ongoing crisis in Europe will continue to play spoilsport for steel prices. Moreover, the world's largest consumer China has lowered imports in order to tone down its property market.

ArcelorMittal, the world's largest steelmaker, said it will cut European output by 10% in the third quarter because of the seasonal drop in demand. Even though we hold a bearish view on these two steel stocks, a spike in stock prices cannot be ruled out in case investors opt for bottom-fishing.