'Good entry point': 2 ASX 200 mining shares now ready to buy

The trouble with cyclical stocks is that the entry point is make-or-break, even for long-term investors.

| More on:
Two mining workers in orange high vis vests walk and talk at a mining site

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

ASX mining shares are notoriously cyclical.

The fortunes of these stocks are closely tied to the global prices for the commodity the underlying businesses produce. In turn, the mineral price fluctuates up and down according to how well the client economies are faring.

This means the appropriate entry price for mining shares is crucial to avoid getting burnt, even for long-term investing.

Here are two mining stocks from the S&P/ASX 200 Index (ASX: XJO) that one expert reckons are ripe to buy at the moment:

'Expect the stock to attract more buyers at recent prices'

The Lynas Rare Earths Ltd (ASX: LYC) share price crashed 37.5% in just two months from February to early April.

But the rare earths producer has bounced back nicely to rocket 23% since 3 May.

Fairmont Equities managing director Michael Gable attributed that to doubts over the future of Lynas' Malaysian operations.

"Lynas shares were recently oversold on the back of concerns that production would be impacted when Lynas switched to its new processing plant in Kalgoorlie," Gable told The Bull.

"With an extension granted to its Malaysian plant, Lynas won't lose any production time."

He now feels like the company can put that uncertainty behind it and the next move for the stock will be upwards.

"Combined with improving sentiment in the resources space, we expect the stock to attract more buyers at recent prices."

The wider professional community also loves Lynas shares at the moment.

According to CMC Markets, a whopping 11 out of 14 analysts currently rate the stock as a buy. Ten of those reckon Lynas is a strong buy.

The share price for this resources giant is 'bottoming'

Mineral Resources Ltd (ASX: MIN) shares have also plunged this year, to the tune of 29.5% since 24 January.

Gable blamed that on "weaker iron ore and lithium prices", but the situation has now turned around.

"Recently, lithium and iron ore prices appear to be finding support," he said.

"The share price of this diversified resources company is also bottoming on the chart. Mineral Resources is potentially a good entry point around recent levels."

Earlier this month, The Motley Fool's Bronwyn Allen also expressed her bullishness for Mineral Resources.

"Following a 25% slide in the Mineral Resources share price over the past four months, I think a buy-the-dip opportunity may exist here," she said.

"Iron ore will be needed to make steel for decades yet, despite decarbonisation, and the move to electric vehicles is a global trend that is only in its infancy."

Nine out of 18 analysts currently surveyed on CMC Markets rate Mineral Resources shares as a buy.

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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 Scott Phillips.

More on Resources Shares

a tired and sad looking bulldog sits at an office desk with a pen an paper on it and a cup of coffee with his head resting on the desk as he gives a mournful look to the camera.
Resources Shares

After crashing 50%, could this ASX All Ords stock rebound?

Such low starting valuations could help.

Read more »

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Resources Shares

Why did the Fortescue share price fall 7% in October?

Let's review what happened with the ASX 200 mining giant in October.

Read more »

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Resources Shares

Why did the BHP share price get hammered in October?

ASX 200 investors sent BHP shares sharply lower in October. But why?

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Resources Shares

Gina Rinehart's empire raked in another $5.6 billion. Here's how

Resources and mining continue to dominate the Australian market.

Read more »

two men in business suits sit across from each other at a table with a chess board on it. Both hold their hands to their chins and look down in serious contemplation of their next move.
Resources Shares

'Not ruled out': Could BHP still buy Anglo-American?

This mega-deal might not be as dead as it looks.

Read more »

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Resources Shares

Mineral Resources share price rockets 16% on $1.1 billion news!

ASX 200 investors appear thrilled with Mineral Resources' latest news.

Read more »

Miner looking at a tablet.
Resources Shares

Here are the latest share price forecasts for Fortescue

Let’s unearth what analysts think could happen with this iron ore miner.

Read more »

A businesswoman ponders why her boat is sinking in the ocean.
Resources Shares

Lake Resources share price sinks on quarterly cash flow news

Let's take a look at the highlights of the company's Q3 update.

Read more »