BAKER STEEL RESOURCES, ON THEIR WAY TO RECOVERY?

INTRODUCTION

Baker Steel Resources is a capital management firm with a strong focus on investments in companies that focus on commodity markets. The company has a strong focus precious metals companies, specialty metals companies and it also enables the development of mining companies that are at the pre IPO stage. Metals prices have been rallying sharply in the back end of 2023 and coming into 2024, as both Chinese economic data improves, the Fed is anticipated to cut interest rates and geopolitical tensions run extremely high. This combination of factors could be providing the ideal environment for companies that deal with metals, in this case, mining companies. This company could be an interesting way to buy into shares.

IT COULD BE THE RIGHT TIME TO CONSIDER INVESTMENT FUNDS LIKE BAKER STEEL RESOURCES

Baker Steel Resources has seen a strong growth of the fund’s Net Asset Value (NAV) reported in December 2023, seeing an increase of 16.3% according to the most recent reports. This is on the back of strong revaluations of assets that the company holds, in particular an Australian Coal Mining company, which saw a 47% increase in its valuation after securing financing for the advancement of one of its own mines. Given the sharp economic rebound in China over the last couple of months, it is likely that Australian mines could continue to perform well, as demand for metals ticks higher.

THE MACRO PICTURE IS RIGHT FOR COMPANIES THAT HOLD MINERS

As discussed in the introduction, there are a number of factors that are likely to continue driving the prices of metals, which in turn should be a catalyst for mining company valuations to improve. Gold prices recently hit a new all-time high, as geopolitical tensions escalate, while rate cut expectations remain strong for June of this year. China’s economic recovery has sparked recoveries in palladium and platinum, while copper prices surged to their highest levels since April 2023. Strong metals prices should be favorable as miners charge a premium for their products, in turn increasing their valuations and ultimately improving the NAV of funds that hold large positions in the miners.

CONCLUSION/SUMMARY

In conclusion, Baker Steel Resources remain a fairly attractive company given the current environment. The company’s share price has increased around 35% in the last six months, and this trend could continue if the metals environment remains as it is, which according to analysts is likely. This combination could make it an attractive market stock today.