Copper has emerged as one of the strongest-performing areas within the materials sector, supported by tariff concerns, shifting global supply flows and growing demand expectations. Investors are also finding opportunities in precious metals companies with strong growth profiles and attractive valuations.
BNN Bloomberg spoke with Martin Pradier, materials analyst at Veritas Investment, about trends driving the materials sector and where he sees the most compelling opportunities across copper, gold and silver markets.
Key Takeaways
- Copper prices have been supported by tariff concerns and shifting global supply flows that are drawing more metal into the U.S. market.
- Precious metals streaming companies can offer protection from inflation because their cost structures are less exposed to rising operating expenses.
- Silver exposure may provide an additional growth catalyst as silver prices have recently outperformed gold.
- Potential project restarts and production growth can create significant upside when markets assign little value to those opportunities.
- Low-cost copper producers with discounted valuations and expanding production profiles may be positioned to benefit from long-term demand growth.
Read the full transcript below:
LINDSAY: It’s time now for Hot Picks. Today, we are zeroing in on the materials sector, and here to tell us more is Martin Pradier, materials analyst at Veritas Investment. It’s great to have you join us. Thanks so much.
MARTIN: Thank you for having me.
LINDSAY: So, I guess before we get into your actual top picks today, just the materials sector as a whole, where are you seeing the most growth right now?
MARTIN: The most growth I see right now is in the copper sector. It’s probably the sector that has done the best year to date.
LINDSAY: Why is that? Because I have noticed over the last couple of weeks that the price of copper has been rising on most days. What’s behind that?
MARTIN: Basically, it’s a fear that the U.S. will increase tariffs on copper. There is now a big price differential between copper in New York and copper in London, so the U.S. is attracting all the copper and raising the price for copper worldwide. Basically, inventories of copper around the world are increasing, especially in the U.S.
LINDSAY: Okay, so let’s get into your picks then. Wheaton Precious Metals is your first one. You believe this will outperform other gold stocks. Why is that?
MARTIN: Well, one of the things that’s been happening is we had inflation, right? My two picks for gold, Wheaton and Franco-Nevada, have the advantage that their costs are relatively fixed. They don’t go up with inflation.
The other thing on Wheaton is that 40 per cent of its revenue is coming from silver. Silver right now is up 100 per cent compared with exactly one year ago, while gold is only up 33 per cent. So it has an advantage in terms of year-over-year earnings growth and should grow faster.
The other thing about this company is the growth that it has. Nobody has this kind of growth. This year, in terms of volume, it should grow 12 per cent. Over the next five years, it is going to grow 50 per cent. Our best gold miner, Agnico, is expected to grow only 20 per cent. So there is a big differential there.
LINDSAY: Sorry, continue.
MARTIN: The third thing is valuation. The valuation is extremely cheap. It is one to two standard deviations below normal on a forward P/E and EV/EBITDA basis, which is the way I look at these stocks. That means it has hardly ever traded at this low a valuation in the last five years, so it’s very interesting in that sense.
LINDSAY: Okay, and when it comes to Wheaton Precious Metals, are there any risks or headwinds for this company moving forward that you’re watching out for?
MARTIN: Not really. At the end of the day, the price of gold is the risk for all gold stocks. If the war with Iran finishes tomorrow, I think there will be a decrease in the price of gold and, therefore, in gold stocks. That’s probably your biggest risk.
LINDSAY: All right. Franco-Nevada is your second one. I know you already touched on it, but if you want to go into more detail about why this is your other pick for today.
MARTIN: This stock is almost like a free option. It’s trading one to two standard deviations below its historical valuation range in terms of forward P/E and EV/EBITDA compared with the last five years.
It also has the potential for earnings to grow about 20 to 30 per cent if Cobre Panama restarts. Cobre Panama was a mine that was shut down a few years ago. The government of Panama needs that mine to restart. We believe there is a 70 to 80 per cent probability that it will restart.
At the time the mine was shut down, the stock declined by about 30 per cent. If the mine restarts, which we think is very likely, then you could see 25 to 30 per cent upside.
LINDSAY: Lastly, we were talking about copper prices to start off this segment. Hudbay Minerals is your last pick. Tell us why.
MARTIN: Well, Hudbay Minerals has a couple of advantages. The first one is that 40 per cent of its revenue comes from gold, and this is one reason why its costs are negative.
For instance, in the last quarter, the cost at Hudbay was negative US$1.80 per pound. On average, the other 10 companies that I follow have costs of positive US$1.46 per pound. So this is a big differential.
We also believe that because the company is guiding to negative US$0.20 to negative US$0.40 per pound for the year, and the first quarter was so strong, while volumes are expected to increase later in the year at two of its mines, we’re likely to see upward revisions to estimates, which is always a catalyst for a stock.
The third thing is valuation. Shares trade at about a 30 per cent discount to the comparable companies we follow.
The other thing is growth. Almost nobody has this kind of growth profile. In 2025, this company will produce 118,000 tonnes of copper. By 2030, it expects to produce 250,000 tonnes, and by 2032, it could produce 350,000 tonnes.
The two major projects coming onstream are both in the U.S., which is a low-risk jurisdiction, and they are relatively straightforward projects with high internal rates of return.
Finally, if you think the U.S. is going to impose tariffs, this company is one of the biggest beneficiaries. If copper is selling at, let’s say, US$5 per pound globally and a tariff is imposed, the U.S. price could rise. Because the company produces copper in the U.S., it would benefit from the higher domestic price without facing tariff costs. It’s a very good place to be if tariffs are implemented.
LINDSAY: All right. We’re going to have to leave it there. Martin Pradier, materials analyst at Veritas Investment. Always great to talk to you. Thanks so much.
MARTIN: Thank you.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| WPM NYSE | N | N | N |
| FNV NYSE | N | N | N |
| HBM TSX | N | N | N |
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This BNN Bloomberg summary and transcript of the June 5, 2026 interview with Martin Pradier are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
