With momentum in the metals and mining industry showing no signs of letting up, it's a great time to take a look at which companies in the space are the favorites of the most successful investors in the Motley Fool CAPS community. CAPS All-Stars are the nearly 12,000 investors who rank above the 80th percentile in portfolio performance among all CAPS players. Their collective stock-picking prowess is proven, so let's see which miners they've adopted as their pets.

In order to identify the best-loved mining stocks with room to grow, I turned to the CAPS Stock Screener tool. Within the Basic Materials sector, I chose to search only within the metals and mining industry for mid-cap stocks with at least a four-star rating and at least 100 ratings by CAPS All-Stars. To ensure that we don't chase momentum into overvalued territory, I included a maximum price-to-book ratio of 2.5. Of the resulting hits, here is a sampling:



All-Star Outperform / Underperform Ratings

CAPS Rating
(5 max)

Aluminum Corp. China (NYSE:ACH)


1,129 / 32


Coeur d'Alene (NYSE:CDE)


411 / 19


Gold Fields Ltd. (NYSE:GFI)


211 / 10


Barrick Gold (NYSE:ABX)


680 / 16


Yamana Gold (NYSE:AUY)


1105 / 12


Source: Motley Fool CAPS.

An All-Star's pain is your gain
Shares of Aluminum Corp. of China (a.k.a. Chalco) took a nosedive recently when the company warned of profit shortfalls caused by this winter's snowstorms in China. All-Star garyb52 is confident that the pain his CAPS score is feeling thanks to his thumbs-up on this stock is only temporary, and senses an opportunity for his fellow Fools:

It has bounced around near its 52-week low for some time now. ... The whole Chinese market has gone through a convulsion in the past six months or so, and some stocks like [Chalco] have been absolutely driven into the ground. The market will recover, as several hundred million Chinese continue to enter the middle class, and the country continues on its relentless path to modernization. The demand for aluminum and other metals is only going to get stronger. I don't see how this can be anything but a "Buy" at this price.

Is cheap silver still available?
By the looks of these All-Star picks, it would appear some bargains remain on the table among the precious-metals miners. Chances are that each of these companies has encountered some challenges thus far in the bull market for precious metals. Provided the issues are temporary, these companies could present enticing entry points for value-minded Fools.

CAPS All-Star binv271828 explains that missteps by management are partially responsible for the beating that shares of silver miner Coeur d'Alene have endured. Here's an excerpt from the recent pitch:

Their mining costs for silver is $3.33/oz. Despite how much I like [Coeur d'Alene] (and I do), their management can be very frustrating. There was the note offering fiasco in March where the company kept changing the offer amount and kept sending very confusing signals about the health of the company. And [Coeur d'Alene] has a number of old mines and legacy costs. However, there [are positive] developments as well. Such as the fact that they brought Cerro Bayo back online early to keep up production. It has recently received appoval to continue operations at several key mines. Despite the headaches, [Coeur d'Alene] is still a very good silver miner and is certainly worth considering.

There's no denying that Couer d'Alene has been slaughtered, with shares declining an embarrassing 40% since I highlighted the company back in March. Despite a hefty short interest at 10% of float, I believe the stock is finding buyers at these levels.

And what about the yellow stuff?
South African miner Gold Fields has had its share of difficulties as well, but All-Star goofypicker is more concerned with the macroeconomic fundamentals. Writing in mid-March after the onset of the correction pattern in precious metals, this player writes:

Gold and silver have taken a sudden drop during the past week. Many speculators are [panicking] and claiming that this is the end of the "commodity bubble". I don't think so. The Fed continues to pump liquidity into the market, inflation continues to increase and the dollar continues to fall. Precious metals will experience quite a bit of volatility and the gyrations may be tough to handle but I think … that a year from now precious metals will be much higher.

I agree wholeheartedly with goofypicker's assessment. While many CAPS All-Stars might be in the doghouse with a few of their mining picks (myself included), I believe there's a hidden treasure of gold, silver, and aluminum buried beneath the wreckage of these battered stocks.

Further Foolishness: