ASX mining shares are considered cyclical because most mineral prices are strongly correlated to the fortunes of the economy.
And with dark clouds forming in Australia, the United States and much of the developed world, the going price for materials such as iron ore and copper are dropping like flies.
But the team at Market Matters reckons such steep falls could soon turn into an opportunity to pick up some bargains.
"We've seen numerous times over the years that the best time to start buying resource stocks is when the macro backdrop looks bad, and vice versa," its memo to clients read.
Buying falling stocks on the back of other people's panic is "not a perfect science", but preparation is crucial.
"Hence from a preparation perspective, [it] is all about where we are considering adding to our existing resources exposure."
So for those investors keen to pounce on a prime buying opportunity, the analysts named four S&P/ASX 200 Index (ASX: XJO) resources shares and when they would jump on them:
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'We don't intend to freeze in the headlights'
Copper producer Sandfire Resources Ltd (ASX: SFR) has seen its shares plunge more than 22% since 19 April, pretty much in line with the commodity price.
The stock closed Friday at $5.49.
"We intend to add to Sandfire around $5.30 and then $5. That is, 'plan your trade and trade your plan'."
The team actually started buying the stock earlier last week when it was just under $6, with a strategy to keep adding into further dips.
"This plan has not changed," said Market Matters leader James Gerrish.
"And importantly, we don't intend to freeze in the headlights if the recession risks increase further."
Shares for multi-mineral producer South32 Ltd (ASX: S32) have cooled off 12.6% since 19 April, to close Friday at $3.93.
The stock has been on the Market Matters shortlist for months.
"We've been patient believing there was a high probability that fears of a recession would increase, leading to further weakness in the resources sector," the memo read.
"We are considering accumulating South32 around $3.60 and then into fresh lows under $3.40."
Following a long-term plan
BHP Group Ltd (ASX: BHP) has seen its share price drop 9.5% since 19 April, with The Big Australian finishing Friday at $42.75.
The Market Matters team sold high last December, intending to add again if it sufficiently fell.
"This stance has not changed as the quality miner continues to rotate between $36 and $50," read the memo.
"We are looking to follow our long-term plan and increase our BHP exposure back below $40."
Mineral Resources Ltd (ASX: MIN) is a diversified miner and a services provider.
Its share price has taken a 17.1% hit since April 19, leaving it at $69.82 at Friday's close.
The Market Matters team bought the stock back in March.
"In hindsight, this was a touch early as the iron ore/lithium miner has now corrected 30%. We thought 25% would cap it!" read the memo.
"The current downtrend is intact; hence we will only consider adding to this position if/when this miner makes fresh 2023 lows."
The team likes Mineral Resources, though, and is looking for the $65 mark to pounce.
