5 Mining Stocks Hit Paydirt

NEW YORK (TheStreet) -- Brigus Gold (BRD), Vale (VALE) and Alcoa (AA) are among a few mining stocks that outperformed the S&P 500 Metals and Mining Index this week gaining 4% to 11%, compared to a 2.1% increase registered by the index. These stocks closed in green, driven by strong company fundamentals.

Among the week's laggards, Compania de Minas Buenaventura ( BVN) eroded 4.1%. Allegheny Technologies ( ATI) followed, declining 3.2%. Solitario Exploration & Royalty ( XPL) and James River Coal ( JRCC) shed 2.1% and 1.7%, respectively.

Below, the five winners are ordered in terms of one-week returns, lowest to highest.

5. Alcoa ( AA) engages in the production and management of aluminum, fabricated aluminum, and alumina combined, participating in mining, refining, smelting, fabricating and recycling. The company has investments and operating activities in China, Australia, Brazil, Guinea, Iceland, Russia and Saudi Arabia. The stock gained 4.2% during the week.

Alcoa is scheduled to release its second quarter 2011 earnings on July 11. Analysts foresee positive results on strong aluminum demand. Alcoa has just entered into a deal to supply advanced-generation aluminum alloy products to Airbus, resulting in new orders worth almost $15.6 billion at the Paris Air Show. The aluminum giant is expected to report earnings per share of 32 cents, improving from 28 cents in 2011 first quarter.

Alcoa and Ma'aden secured a $1 billion loan from Public Investment Funds for phase II of an aluminum project in Saudi Arabia. The project is a part of the $10 billion Ma'aden-Alcoa joint venture that includes the construction of an aluminum smelter and rolling mill at Ras Az Zawr.

Of the 18 analysts covering the stock, 56% recommend a buy and 28% rate it a hold. On average, analysts estimate 19.5% upside to $19.71 in value from current levels.

4. BHP Billiton ( BHP), a diversified natural resources company, operates nine customer sector groups: petroleum, aluminum, base metals (including uranium), diamonds and specialty products, stainless steel materials, iron ore, manganese, metallurgical coal and energy coal. The stock gained 4.4% this week.

The company said it restarted its iron-ore port and rail operations at Port Hedland in Western Australia, after work was suspended. The facility, the world's second-largest iron-ore port, is expected to ramp up to normal by today.

Additionally, BHP said it may add to the $23 billion spent in share buyback since 2004 as it seeks to deploy cash generated in record profit. The company, which has completed a $10 billion share buyback six months ahead of schedule, would still have $65 billion acquisition in the second half of the year, without piling any pressure on its balance sheet.

Of the three analysts covering the stock, two recommend buying it and one rates it a hold. There are no sell ratings on the stock. On average, analysts estimate 11.9% upside to $108.30 in value from current levels.

3. Vale ( VALE), the Brazilian metals and mining giant, engages in the production of iron ore and iron ore pellets, manganese ore, ferroalloys, copper, thermal and coking coal, phosphates, potash, cobalt, kaolin and platinum group metals. The company also invests in energy and steel businesses. The stock gained 5.6% over the past week.

Shareholders of Brazilian consortium Norte Energia, responsible for the 11.2 gigawatt Belo Monte hydro project, approved the participation of Vale in the group, a source close to the consortium revealed. Vale, which holds 9% stake in the plant, will pay $1.4 billion for the same.

In a positive development, Argentina's Mendoza Province has lifted its suspension of the multibillion dollar Rio Colorado potash mine project being developed by Vale. The company is eyeing soaring demand for potash-based fertilizers in the south of Brazil, where soybean cultivation has expanded sharply in recent years.

Of the 23 analysts covering the stock, 87% recommend buying it and the remaining rate it a hold. There are no sell ratings on the stock. On average, analysts estimate 28.2% upside to $42.75 in value from current levels.

2. Worthington Industries ( WOR) is a diversified metals processing company focused on steel processing and manufactured metal products. With 41 manufacturing facilities worldwide, the company has structured its operations into three segments: Steel Processing, Pressure Cylinders and Metal Framing. Continuing its winning streak from the earlier week, the stock gained 11.2% during the past week.

Also this week, the company's Pressure Cylinders segment purchased the BernzOmatic business from Irwin Industrial Tool, a subsidiary of Newell Rubbermaid for $51 million. BernzOmatic manufactures hand-held torches, solders, accessories and related products, earning almost $100 million in revenue in 2010.

Also, Jefferies initiated coverage on the stock with a hold rating. The research company assigned $26 price target for the stock.

Of the eight analysts covering the stock, one suggests a buy while the remaining rate it a hold. There are no sell ratings on the stock. On average, analysts estimate 15.4% upside to $27.00 in value from current levels.

1. Brigus Gold ( BRD), a Canada-based mining company, engages in the extraction, processing, refining of gold deposits and related activities such as acquisition, exploration and development of mineral properties, principally in North America. The stock accumulated 11.3% during the week.

The company announced that exploratory drilling on the southern portion of the Black Fox Complex is returning excellent gold assays over significant widths within the new 147 Gold Zone, including 3.94 gpt over 24.20 meters that includes 6.86 gpt over 11.77 m. The Zone, which opens in all directions, now extends to a vertical depth of 240 meters below surface with drill hole GF11-206 returning excellent gold assay results.

Meanwhile, the recent uptrend in gold prices due to the weakened credit outlook for China's banks has boosted demand for precious metals to hedge against declines in other assets, pushing gold producers in the green. Furthermore, this has led to record quarterly profits for these companies.

Both the analysts covering the stock, suggest a buy rating on it. There are no sell ratings on the stock. On average, analysts estimate 46.7% upside to $2.60 in value from current levels.

>>To see these stocks in action, visit the 5 Mining Stocks Hit Paydirt portfolio on Stockpickr.

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