Amidst all the turmoil this year when assets worldwide took a hit due to the Russian invasion of Ukraine, surging inflation and ensuing action taken by central banks, an Indonesian mining stock has become the unlikely top performer of 2022 with gains of over 1,600% as the year draws to a close.
What Happened: PT Adaro Minerals Indonesia has seen its share price soar since its Jan. 3 debut in Jakarta, rising from 100 rupiahs to 2,990 rupiahs in just over three months before a downturn began. It was trading at 1,710 rupiahs on Thursday at the time of writing, with a market cap of about $4.5 billion. This was first reported by Bloomberg.
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Analysts are expecting more gains thanks to the company’s strategy to use its windfall profit to diversify into aluminum and battery-making for electric vehicles, reported Bloomberg.
Estimates from five analysts compiled by Bloomberg indicate another 42% upside in the stock price over the next 12 months. Interestingly, Adaro’s price-to-book ratio stands at about 9.4 and is close to its lowest level since listing, according to Bloomberg-compiled data. This, however, is about six times higher than its domestic peers.
Pipping Big Oil: Energy stocks have gained this year on the back of rising oil prices led by supply-side concerns. Exxon Mobil Corp XOM shares are up 67%, while Warren Buffett-backed Occidental Petroleum Corporation OXY has gained 105%. These returns are still a far cry from Adaro’s performance.
Price Action: Compared to PT Adaro Minerals, some of the U.S.-listed coal stocks have given lower returns; although on an absolute basis, the returns are impressive.
Hallador Energy Co HNRG has risen over 255% since the beginning of the year, while Peabody Energy Corporation BTU shares are up 150%. Arch Resources Inc ARCH has risen over 54% and Warrior Met Coal Inc HCC has risen over 37%.
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