Peter Boockvar: Southern Copper Could Double In The Next Few Years

Summary

• Copper will be the most important industrial metal with the most attractive fundamentals over the next decade, according to Bleakley Advisory Group CIO Peter Boockvar.
• In the short-term, copper may get beaten down further, particularly if the globe goes into recession.
• However, for the long-term, Boockvar likes buying copper miner Southern Copper at current levels. He thinks the stock could double over the next few years.

Copper is in a cyclical downturn but the secular story for the metal is positive, Bleakley Advisory Group CIO Peter Boockvar has told viewers of Real Vision’s Trade Ideas.

“In terms of what it’s going to be used for, copper is the most important industrial metal with the most attractive fundamentals over the next 10 years,” he said. “Solar, wind, and electric vehicles are going to be voracious buyers of copper.”

The Trade

Boockvar likes Southern Copper (NYSE:SCCO), as a way to play this long-term trend.

“This is a company with a strong balance sheet that can get through any short-term difficult time,” he said. “I'm expecting copper to go to $4 or $5 a pound from $2.50 to $2.60 now.”

Source: Bloomberg

Boockvar acknowledged that trading in commodities is hugely volatile, and that copper may dip as low as $2. But he added: “The upside to me is much greater than the downside.”

In the shorter-term, Boockvar said he is “really optimistic” about both gold and silver.

“Copper is going to be in more of a difficult situation in the short term because of the cyclical demand issues that it's now experiencing,” he said. “[Gold and silver are] where the bull market is right now.”

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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