December 14, 2011 at 13:21 PM EST
9 Mining Stocks to Keep Buried
Investors have a right to be afraid of deflation and European debt. At the very least, it means a decline for companies that deal with basic materials.

Add the possibility of deflation to renewed European debt jitters, and you’ve got yourself a case for a decline in basic materials and precious metals. But don’t just take the latest news as an example. The majority of stocks that rely on the mining of basic materials have been on a downward tear ever since the August lows.

I watch more than 5,000 publicly traded companies with my Portfolio Grader tool, ranking companies by a number of fundamental and quantitative measures. And this week, I’ve got nine mining stocks to keep buried.

Here they are, in alphabetical order. Each one of these stocks gets a “D” or “F” according to my research, meaning it is a “sell” or “strong sell.”

Alcoa (NYSE:AA) is engaged with the mining, refining, smelting, fabricating and recycling of aluminum products. A drop of 42% for AA stock in the past 12 months has shareholders questioning what they initially saw in the stock. AA gets an “F” for earnings momentum, an “F” for the company’s ability to exceed consensus earnings estimates on Wall Street and an “F” for the magnitude in which earnings projections have increased over the past months in my Portfolio grader tool. For more information, view my complete analysis of AA stock.

ArcelorMittal (NYSE:MT) shipped more than 85 million tons of steel in 2010. Despite such high volume, MT stock is down a discouraging 56% year-to-date. MT stock gets a “D” for operating margin growth, an “F” for the company’s ability to exceed consensus earnings estimates on Wall Street, an “F” for the magnitude in which earnings projections have increased over the past month, a “D” for cash flow and a “D” for return on equity in my Portfolio Grader tool. For more information, view my complete analysis of MT stock.

Freeport-McMoRan Copper & Gold (NYSE:FCX) is known for copper, gold and molybdenum mining. Since the start of 2011, FCX stock is down 38%, compared to a gain of 2% for the Dow Jones in the same period. FCX gets a “D” for sales growth, a “D” for earnings growth, a “D” for earnings momentum and an “F” for the magnitude in which earnings projections have increased during the past month in my Portfolio Grader tool. For more information, view my complete analysis of FCX stock.

Gerdau (NYSE:GGB) is a producer of long-rolled steel that has watched its stock value decrease nearly 48% since the start of 2011. GGB gets a “D” for operating margin growth, a “D” for earnings growth, a “D” for the magnitude in which earnings projections have increased over the past month and a “D” for return on equity in my Portfolio Grader tool. For more information, view my complete analysis of GGB stock.


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