Insights

Strong growth potential for Mineral Resources (ASX:MIN) share price: fundie

The Mineral Resources share price has soared 111% higher so far in 2020. But this fund manager sees more growth ahead.
The post Strong growth potential for Mineral Resources (ASX:MIN) share price: fundie appeared first on The Motley Fool Australia. –

fund manager standing on increasing tiles of bricks reaching for the stars

Mineral Resources Limited (ASX: MIN) shares have soared 111% higher so far in 2020. And this is no mining minnow we’re talking about. Based on the current Mineral Resources share price, the company has a market capitalisation of $6.6 billion.

Though slipping today, down 1% in afternoon trading, Mineral Resources shares hit a new all-time high yesterday, closing at $35.07. That’s a remarkable 176% higher than the $12.71 per share the stock was trading at on 23 March following the COVID-19 market panic.

Yet despite that meteoric rise, Montgomery Lucent Investment Management’s Dominic Rose sees strong growth potential ahead.

We’ll look at why below. But first…

What does Mineral Resources do?

Mineral Resources is a mining services company with a portfolio of mining operations across lithium and iron ore. The business consists of three core pillars: mining services, commodities, and innovation and infrastructure.

Mineral Resources’ subsidiary businesses offer a range of general mine services, contract crushing, infrastructure provision and recovery of base metals concentrate for export. Mineral Resources is part of the S&P/ASX 200 Index (ASX: XJO).

Why this fundie sees upside to the Mineral Resources share price

Dominic Rose is portfolio manager of the Montgomery Small Companies Fund.

Writing in Livewire, Dominic notes Mineral Resources is a “highly entrepreneurial company with strong growth potential from its iron ore and lithium operations and a proven track record of value creation”.

One of the company’s two pillars is iron ore. And it’s no secret that iron ore prices have gone through the roof. With Brazilian supply issues hitting just as Chinese demand for the metal rockets, iron ore is trading at multi-year highs, above US$140 per tonne. And, as Dominic writes, Mineral Resources is planning major expansions of its iron ore production.

MIN [Mineral Resources] plans to grow its iron ore business significantly over the next three to five years, targeting production expansion from c.20 million tonnes per annum to 90 million tonnes per annum via a multi-stage hub strategy.

Lithium, Mineral Resources’ second pillar, also looks to have a strong growth demand ahead. According to Dominic:

After a tough few years, the outlook for lithium also appears to be improving on the back of favourable ‘green’ stimulus support in Europe and a potentially more climate friendly regime in the US. We view battery materials as an attractive long-term theme (green energy, decarbonisation) and MIN is particularly well positioned to benefit from a market recovery.

With both iron ore and lithium in the spotlight, it will be interesting to see how the Mineral Resources share price performs moving forward.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Strong growth potential for Mineral Resources (ASX:MIN) share price: fundie appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!