Bouncing back from its slide in the beginning of August, the S&P 500 is now up more than 17% since the start of the year.
However, some stocks have failed to keep pace. SSR Mining (NASDAQ: SSRM) and Hexcel(NYSE: HXL) have plunged 48% and 13%, respectively. Smart investors know, though, that simply because the market has soured on a stock doesn't mean that it's unwise to pick up shares. In fact, it's times like these that present stellar opportunities for growth.
Let's see how two Fool.com contributors present the bull arguments for precious metals stock SSR Mining and industrial metals manufacturer Hexcel.
SSR Mining should recover from catastrophe
Scott Levine(SSR Mining): Earlier this year, SSR Mining experienced a tragedy when there was an accident on the heap leach pad at its Copler gold mine in Turkey. Due to the event, SSR Mining suspended operations, and it's now working with authorities to obtain the necessary operating permits to resume activities.
The impact on the company's financials has been notable. SSR Mining reported revenue of $184.8 million in the second quarter of 2024, a year-over-year decline of 38.6%. The bottom of the income statement also paled in comparison. The company reported diluted earnings per share (EPS) of $0.05 in Q2 2024, representing an 86% decrease from the same period last year.
It's important to remember, of course, that tragedies such as the one that SSR Mining suffered are not unheard of, since mining operations are inherently dangerous. The question, therefore, is will the company be able to overcome the catastrophe? And the answer is likely yes.
Had SSR Mining been in a precarious financial situation, the outlook may be less hopeful. Some mining companies rely heavily on leverage, for example, to advance development of their projects. This isn't the case with SSR Mining, though. At the end of Q2 2024, SSR Mining had a net cash position of $128.4 million.
While operations at Copler are currently suspended, the company's other assets -- Puna, Marigold, and Seabee -- are in full swing, and management recently reaffirmed that these three assets are on track to achieve their 2024 gold equivalent ounces production guidance of 340,000 to 380,000. Moreover, the company has made progress on activities at the Hod Maden gold-copper deposit, and the company is nearing a decision on whether it will pursue development of the project.
With shares of SSR Mining trading at 7.6 times forward earnings, now seems like a great time to add some luster to your portfolio with this beaten-down precious metals producer.
Hexcel's long-term growth prospects are assured
Lee Samaha(Hexcel): Advanced composite materials company Hexcel has had a challenging year. Its stock is down almost 14% in 2024 and is more than 28% off its all-time high. The reason comes down to the disappointing updates from Boeing and Airbus on airplane production. Both global airplane manufacturers will produce fewer airplanes than planned for this year.
That's bad news for Hexcel because, unlike many other aerospace suppliers, it doesn't have significant aftermarket revenue to fall back on when airplane production slows. It's even worse news, considering Hexcel was ramping up its own production capability to meet increased demand.
That said, Airbus and Boeing will undoubtedly do everything they can to increase deliveries, so this looks like a pushout of demand rather than a cancellation. Meanwhile, airlines continue to place orders.
In addition, Hexcel's long-term prospects continue to look excellent as each generation of airplanes uses more advanced composite content. For reference, its materials are lighter and stronger than traditional materials like aluminum and help improve efficiency and reduce emissions.
Boeing believes there's a need for 43,975 new airplanes from 2024-2043, which spells plenty of market opportunity for growth from increased airplane production and Hexcel content per plane. This makes the dip in the price a good buying opportunity in a long-term growth stock.
Should you buy these stocks now?
With a tide of bullish enthusiasm pervading markets right now, many stocks are trading at high valuations, making it difficult to find worthwhile buying opportunities. This isn't the case with SSR Mining and Hexcel, however. Both stocks have trended downward through 2024, yet they remain attractive investment options.
For those with long-term investing horizons, today is a great time to dig further into SSR Mining, a leading gold and silver producer. On the other hand, those looking to take flight with a top aerospace stock will want to take a closer look at Hexcel.
Should you invest $1,000 in SSR Mining right now?
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Lee Samaha has no position in any of the stocks mentioned. Scott Levine has no position in any of the stocks mentioned. The Motley Fool recommends Hexcel. The Motley Fool has a disclosure policy.
