Of course, the mining sector has experienced an improved performance in the last couple of years. With the prospects for an upbeat world economy, does this mean that other mining companies such as Glencore (LSE: GLEN) could represent bargain investment opportunities at the present time?

Low valuation

The potential buyer of Vedanta is a holding company which is wholly owned by the Anil Agarwal discretionary trust. It already owns 66.53% of the company and it appears as though it’s taking advantage of what appears to be a relatively low valuation for the stock.

As mentioned, the offer values the company at 825p per share. While this is a 27.6% premium to the closing price of 647p per share on 29 June and a 13.5% premium to the three-month volume weighted average price of 727p per share, it still represents a relatively wide margin of safety for the buyer. Vedanta currently trades on a price-to-earnings (P/E) ratio of around 7.8 using 2018’s forecast earnings figure. That’s even after today’s share price rise has been factored in.

Uncertain future?

Of course, the mining sector has experienced a volatile number of years. Commodity prices have picked up in the last couple of years, but were weak for a prolonged period. Therefore, it could be argued that valuations across the sector should reflect this.

However, the valuation of Vedanta and other mining shares such as Glencore suggests that there could be value investing opportunities on offer. For example, Glencore trades on a P/E ratio of 11, which indicates that it could generate high returns in the long run.

Catalyst

One potential catalyst for the stock is the outlook for the global economy. The US and China are performing relatively well at the present time and this trend is expected to continue over the medium term. Both economies appear to be strong, and while a trade war remains a possible threat, ultimately it seems to be highly unlikely due to the potential damage it could cause to both economies.

Therefore, the mining sector could enjoy a prosperous period. Glencore seems to now be in a stronger position from an operational and financial perspective. It has restructured its business in the last few years and this has created a company better able to survive the ups and downs of the commodity cycle. As a result, and with the potential for further M&A activity across the sector, the stock could be worth a closer look for long-term investors.

The post Is the Glencore share price a bargain after Vedanta surges 25% on bid approach? appeared first on The Twelfth Magpie.

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Peter Stephens has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

However, it’s not the only resources company that could be worth buying right now. Another company with a low valuation may offer the potential for high returns in the long run.

Improving prospects

While Amerisur’s share price is down today, its news releases appear to be positive overall. It announced that it has made its first complete tanker loading from Esmeraldas on 22 March of 350,000 barrels of crude.

It also announced the rig mobilisation to, and spudding of, the Pintadillo-1 well. This is the first of up to three wells which will target the N Sand anomaly within the Platanillo block. There are four anomalies in total, with the well targeting estimated P50 resources of 11.44m barrels of oil.

Looking ahead, Amerisur is expected to deliver improving financial performance over the next couple of years. Despite this, it trades on a forward price-to-earnings (P/E) ratio of around 10, which suggests that it may be undervalued. That’s especially the case since it has significant exploration potential which could allow it to deliver improving levels of profitability over the medium term.

As such, while its share price may continue to be volatile in the near term, the company could be a strong performer over the coming years. An improving oil price may help to boost investor sentiment in the stock over the long term.

Margin of safety

Also offering a wide margin of safety in the resources industry is Vedanta (LSE: VED). It offers a diverse business model which could provide it with a lower risk profile than many of its industry peers. Certainly, its financial performance is highly dependent on the prices of a range of commodities. But with the outlook for the global economy being relatively upbeat, it could generate improving levels of profitability over the medium term.

In fact, Vedanta’s earnings are due to double in the current financial year. This puts it on a forward P/E ratio of around 6, which suggests that it offers a wide margin of safety. And with it yielding around 6% from a dividend that is expected to be covered 2.7 times by profit this year, the company appears to offer high total return potential.

Although investor sentiment may take time to improve after what has been a tough period for the commodities sector, solid financial performance could lead to higher valuations across the sector. Therefore, while not without risk, now could be the perfect time to buy Amerisur and Vedanta for their long-term growth prospects.

The post Amerisur plc isn’t the only top value share I’d buy after its 10% slump appeared first on The Twelfth Magpie.

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Peter Stephens has no position in any of the shares mentioned. The Motley Fool UK has recommended Amerisur Resources. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

With that in mind, oil and gas exploration company Hurricane Energy (LSE: HUR) could offer strong turnaround potential. However, it’s not the only resources company offering the potential to generate improving share price performance in future.

Improving outlook

Releasing a production update on Friday was diversified resources stock Vedanta (LSE: VED). Its third quarter performance was relatively upbeat, with its earnings before interest, tax, depreciation and amortisation (EBITDA) rising by 21% versus the same period of the prior year. This was driven by rising volumes and higher commodity prices, although this was offset to some degree by higher input commodity cost inflation.

Furthermore, the company’s ramp-up plans across its asset base are on track. In the third quarter, its Zinc India production increased by 7%, aluminium production was up 40% and Copper Zambia production increased by 12%. There was also progress made in its oil and gas division, with contracts being awarded for growth prospects announced in November 2017. Meanwhile, its iron ore and power business units continue to make encouraging progress.

With Vedanta’s share price having fallen 23% in the last year, it now trades on a relatively low valuation given its financial outlook. The company is expected to report a rise in earnings of 62% in the next financial year. This puts it on a price-to-earnings growth (PEG) ratio of just 0.1, which suggests that it could offer strong turnaround potential.

Encouraging progress

Also falling in the last year have been shares in Hurricane Energy. It is down around 26% during the time period and it has suffered to some extent from uncertainty regarding its future prospects. Its strategy has been called into question in recent months, while changes in management have had a destabilising effect on investor sentiment.

However, the company continues to make good progress with its Lancaster Early Production System (EPS), with it targeting first production in 2019. This could mean that the stock is able to generate significantly improved financial performance over the next couple of years. This may mean that investors begin to place a higher valuation on the business over the medium term.

Furthermore, Hurricane Energy could see its valuation rise due to the higher oil price. Oil is now trading at its highest level since 2014 and with demand and supply forecast to be close to equilibrium this year, the current price level appears to be sustainable. As such, the company could be a strong turnaround option and while risky, its potential rewards could be high.

The post One turnaround growth stock I’d buy alongside Hurricane Energy plc appeared first on The Twelfth Magpie.

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• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

With that in mind, here are two companies that have experienced a difficult recent past but which could post high returns in the long run.

Improving outlook

Releasing a production update for the second quarter of the year on Tuesday was Vedanta Resources (LSE: VED). The company’s operational performance during the period was relatively robust. Refined zinc-lead metal production rose 27% versus the same quarter of the previous year, while refined silver production was at a record level, which was 31% higher than last year.

The company also posted record aluminium production as well as record quarterly copper cathode production. Its oil and gas division also made progress, with the company commencing a 15-well infill drilling campaign at Mangala.

With Vedanta having returned to profitability last year after two years of losses, the company now seems to be on track to deliver improved financial performance. Next year, for example, it is expected to record a rise in its bottom line of 59%. This puts its shares on a price-to-earnings growth (PEG) ratio of just 0.2, which suggests that it offers significant upside potential.

Furthermore, the company is expected to have a dividend yield of 4.2% from a dividend which is due to be covered 2.7 times by profit. This suggests that additional dividend growth could be on the cards. As such, while commodity prices will inevitably fluctuate over the medium term, Vedanta appears to have significant investment potential in the long term.

Turnaround potential

Also offering upside potential in the long run is platinum producer Lonmin (LSE: LMI). The company has not yet been able to return to profitability after a challenging period that has seen the price of platinum come under pressure. Concern about the future use of diesel cars means demand for the commodity has fallen, and this means that Lonmin is forecast to remain in the red over the current year and into next year.

Despite this, the company could have investment potential. It has a sound turnaround plan which is aiming to make the business more efficient. In addition, it has recently acquired the Pandora JV and has been able to obtain a potential waiver of its banking covenants in the short run. This move could provide the company with some breathing space while it implements its strategy and may lead to improved financial performance in future.

While Lonmin is clearly a relatively risky stock to own, it has the potential to deliver improved share price performance through a mixture of cost cuts and growth prospects.

The post Investing in these 2 stocks now could make you a millionaire retiree appeared first on The Twelfth Magpie.

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• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Peter Stephens has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

At first glance, Vedanta’s half year was disappointing. As mentioned, it remained loss-making, but this figure masks the progress being made by the business. Vedanta was able to reduce costs during the period so that its profit margins at the EBITDA (earnings before interest, tax, depreciation and amortisation level) were their highest for two years.

Strong free cash flow

This helped to narrow the net loss from the same period of the prior year. In the first half of 2015, Vedanta’s net loss was $325m versus $64m in the first half of 2016. Vedanta increased production at its aluminium, power and iron ore assets. It was also able to record strong free cash flow as well as continue with the process of de-leveraging its balance sheet.

However, Vedanta was hurt by lower commodity prices. Clearly, there is the potential for further falls over the short to medium term, but Vedanta’s diverse business model should help it to overcome them in the long run. Furthermore, Vedanta is expected to record a strong second half performance so that its bottom line is in the black for the full year. This should help to improve investor sentiment and push its share price higher.

Looking ahead to next year, Vedanta’s earnings per share are expected to rise from 9p to 41p. This puts it on a price-to-earnings growth (PEG) ratio of 0.1, which indicates that it offers a wide margin of safety. Therefore, while the outlook for commodity prices may be uncertain, Vedanta’s valuation shows that it has appeal for the long term even in a challenging operating environment.

Lower risk

Of course, Vedanta is not the only resources stock which could be worth buying. Anglo American (LSE: AAL) has a bright future thanks in part to the restructuring which it is in the process of conducting. It will mean a slimmer and more efficient business which is more focused on operations that offer long term value creation for its investors. Although this has meant one-off costs in the short run, it should lead to improved financial performance in future years.

Anglo American also trades on a PEG ratio of only 0.1. However, its risk profile may be lower than that of Vedanta as a result of its asset disposals. They should improve Anglo American’s cash flow and balance sheet at a time when Vedanta is increasing risk by merging with Cairn India. Therefore, Anglo American may have similar potential rewards on offer to those of Vedanta, but with a lower risk profile. It could therefore prove to be a better buy than Vedanta.

The post Should you give up on this resources stock after its $64m loss? appeared first on The Twelfth Magpie.

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• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Peter Stephens owns shares of Anglo American. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Vedanta’s overall focus is on ramping up production. For example, its Zinc India operations recorded a rise in mined metal production of 51% as well as an increase in silver production of 21%. This upward trend is forecast to continue into the third and fourth quarters of the year. Alongside this rise in production, Vedanta’s aluminium operations have also expanded. In this area, it has endured some operational challenges. However, crucially for Vedanta’s investors it doesn’t expect its full-year aluminium volumes to be affected.

Of course, Vedanta’s increasing production coupled with higher commodity prices is set to cause a return to profitability in the current year. Vedanta’s pre-tax profit is expected to be £639m this year following two years of losses. Furthermore, pre-tax profit is forecast to rise to £822m in the next financial year, which could improve investor sentiment in the stock and push its share price higher.

Clearly, this is largely dependent on the prices of commodities. Although the outlook for oil, iron ore and copper is now much brighter than it was earlier in the year, the reality is that commodity prices could come under pressure. An Opec deal to cut oil production may now be more likely than a few weeks ago, but there’s still likely to be a glut of supply. Similarly, rising iron ore production could hurt its price over the coming years.

Going for gold

Although Vedanta is well-diversified, the commodity price falls of recent years showed that they can fall in unison. In such a situation, the best performing commodity could prove to be gold. It’s viewed as a relatively safe haven which, given the uncertain outlook for the global economy, could be a good place to invest over the medium term.

While gold miners such as Randgold Resources (LSE: RRS) have recorded share prices rises of up to 73% this year, they still offer good value for money. In Randgold’s case, it trades on a price-to-earnings growth (PEG) ratio of 0.7 thanks to a forecast rise in earnings of 50% in the current year and further growth of 30% next year.

Looking ahead, the price of gold could come under pressure due to US interest rate rises. However, the chances of them increasing were reduced somewhat by slightly disappointing US employment data released last week. In addition, only one rate rise is forecast for the next year, which means that the price of gold (and Randgold Resources’ profitability) could remain high over the medium term.

As such, Randgold Resources is a sound buy, while Vedanta offers upbeat turnaround prospects. It may not have the defensive qualities of a gold miner such as Randgold Resources, but Vedanta’s increasing production should boost its financial performance and share price in future.

The post Should you buy this resources stock after it ramps up production? appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Premier is continuing to progress well in negotiations regarding its existing debt arrangements. It’s targeting agreement of terms for the current quarter and states in today’s update that a further deferral of the covenant test date will be sought if required.

Clearly, it’s a relatively risky investment owing to its uncertain financial outlook. The company has an appealing asset base and is making changes to its business model to reduce costs and become more efficient. However, it’s set to remain lossmaking in each of the next two years. Therefore, it may only be of interest to less risk-averse investors, although its shares offer considerable upside potential if the price of oil continues to stabilise and then recover.

Lower costs

Also updating the market today was Lonmin (LSE: LMI). The platinum producer’s third quarter production numbers saw mined platinum ounces rise by 3.3% even though the company’s workforce has fallen by 19% since June 2015. Furthermore, its unit costs fell by 2.2% despite South African inflation standing at 6.3% and Lonmin enduring an increased number of safety stoppages.

Looking ahead, its net cash position of $91m and sound strategy indicate that the shares could continue to rise following their 187% gain since the start of the year. And with Lonmin not having fully harnessed the associated benefits and productivity gains on offer, its performance could improve over the medium term.

Clearly, it’s highly dependent on the price of platinum and on investor sentiment towards the mining sector. But with cash generation set to improve and Lonmin forecast to return to profit next year, it has appeal for less risk-averse investors who are able to take a long-term view.

Continuing progress

Meanwhile, shares in Vedanta (LSE: VED) have fallen by 2% today after it released production numbers for the first quarter of the current financial year. It continues to make good progress regarding the ramp-up of capacities at its aluminium, power and iron ore businesses, with those three segments set to be significant contributors to earnings over the course of the year. And while Vedanta’s zinc division saw lower mined metal production, it’s making good progress towards optimising costs in its copper division.

Looking ahead, Vedanta is focused on reducing its balance sheet risk, as well as reducing costs through a rationalisation programme. Its cash flow is also likely to rise due to those changes and as a result, its shares could continue to rise following their 100%-plus gain year-to-date.

The post 3 resource stocks to buy on today’s news? appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

I think the following three companies should fly if commodity prices recover and today I’m investigating which is the best buy. 

UK oiler

Premier Oil (LSE: PMO) has been one of London’s best performing stocks this year and is up over 270% since lows in January. The company announced a covenant accretive acquisition of E.ON’s North Sea assets and investors received the news well. Naturally the share price has ticked up with the oil price, but Premier has some problems to overcome in the second half of the year. The company is aiming to produce 65-70 kboepd (thousand barrels of oil equivalent per day) by the end of 2016 with the new Solan field boosting production.

Operationally the company seem to have increased production and lowered costs. The balance sheet is where the red flags appear and there is a chance Premier will breach banking covenants by the end of 2016. The company has $750m of liquidity at the moment and is already in negotiations with lenders which is encouraging. If some agreement can be made with lenders then Premier looks set to outperform. 

Kazak copper

Kaz Minerals (LSE: KAZ) is a copper miner focused in Kazakhstan. The location of the mine is perfect for transport into China for sale. The problem is that Chinese demand for copper isn’t growing as expected and due to this the price for copper has crashed over the last 5 years. The company also has lots of debt on the balance sheet and net debt currently stands at $2.4bn.

Just like Premier, the company is in active discussions with lenders about covenants. If the copper price doesn’t increase by a fair chunk this year then its a very real possibility that Kaz could breach debt covenants in 2016. 

Diversified miner

Vedanta Resources (LSE: VED) has interests in zinc, copper, iron ore and oil to name a few. The company is obviously highly geared to commodity prices and this was seen in its 2016 results. Revenue fell by over $2bn to $10.7bn and EDITDA fell by over $1.3bn to $2.3bn. This was accompanied by downgrade of Vedanta’s ratings by Moody’s and Standard & Poor’s which meant covenants had to be renegotiated.

After a small reduction, net debt now stands at $7.3bn but gearing is a whopping 52%. The company needs commodity prices to significantly increase in the next year to return to profitability and reduce the gearing ratio. I believe this will happen but possibly not to the extent that Vedanta need to become a worthy investment. 

Overall, I think all three of these companies have big challenges ahead but Premier Oil seems the most likely to survive. Premier has a strong asset base and revenue will be boosted with new production from Solan. This should help negotiations with bankers and ensure that the company survives in its current form. 

The post Have we seen the bottom in Premier Oil plc, Kaz Minerals plc and Vedanta Resources plc? appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Jack Dingwall has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

In terms of financial performance, Sirius Minerals continues to be a lossmaking entity, with losses of £7m being recorded. However, this is to be expected since the company has no revenue stream and isn’t expected to have one for a number of years. However, with progress towards its goal of building a $1.6bn potash mine that’s capable of producing 10m tonnes of polyhalite per year being on track, it seems to be making good progress towards long-term profitability.  

One area that remains uncertain, though, is funding for the project. Clearly, the resources sector is undergoing a difficult period and investment/borrowings may be more difficult to come by. That’s especially the case since Sirius Minerals is a relatively early stage business and with a number of other resources companies being profitable, there may be better options available elsewhere despite Sirius Minerals’ positive long-term outlook.

What’s the alternative?

One such company is Antofagasta (LSE: ANTO), with the copper, gold and molybdenum miner due to update the market on recent progress this week. As such, its shares could be volatile in the very short run, but for long-term investors they continue to offer high potential rewards and risks that seem to be compensated for via a wide safety margin.

For example, Antofagasta trades on a price-to-earnings-growth (PEG) ratio of 0.5, which indicates that it offers growth at a very reasonable price. Furthermore, with it having sold off non-core assets in recent years, it appears to be relatively financially sound and capable of overcoming the short term challenges that many mining companies are facing. Plus, with Antofagasta having a gold mining operation, it could benefit from further uncertainty in the wider stock market as well as a slower than expected rise in US interest rates.

Share price boost

Also offering an upbeat outlook is Vedanta Resources (LSE: VED). The highly diversified resources company is expected to grow its pre-tax profit from £112m in the financial year just passed to just under £500m in financial year 2018. Clearly, such forecasts are subject to changes in commodity prices and a prolonged fall in their price could cause downgrades to Vedanta’s guidance. However, if they’re met, investor sentiment could continue to improve and boost Vedanta’s share price, as has been the case in the last three months when they’ve almost doubled.

Furthermore, Vedanta is expected to yield around 3.8% in the current year. While this may be below the FTSE 100’s yield, for a resources company it remains relatively appealing and could help investor sentiment to improve at a faster rate than it otherwise would.

The post Do Today’s Results From Sirius Minerals PLC Make It A Better Buy Than Antofagasta plc & Vedanta Resources plc? appeared first on The Twelfth Magpie.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fertiliser supplier fades

Potassium digger African Potash (LSE: AFPO) collapsed 43% in Friday business, after furnishing the market with disappointing operational news.

African Potash advised that the severe drought hitting southern Africa has prompted a deal to supply 20,000 metric tonnes of urea to a COMESA customer to fall through. The client in question is still awaiting confirmation of order from its own customers, African Potash advised.

On top of this, particularly dry conditions in Zimbabwe has seen an agreement inked back in December with Windmill fall through, African Potash said.

In brighter news, African Potash also announced it had signed a participation agreement with Safyr Commodities — which itself has inked conditional sales agreements with leading Zambian fertiliser distributor Nyiombo Investments — for the supply of 50,000 tonnes of urea and NPK.

But investors have naturally given this news short shrift. African Potash is already on shaky ground, the company having seen pre-tax losses swell to $716,000 in July-December, up from $660,000 a year earlier.

Given the scale of unfavourable climate conditions on its revenues outlook, I believe African Potash is a risk too far at the present time.

Software play strides

Cerillion (LSE: CER) has seen its share price jump almost 8% today, after it advised the market that results for the first half of the year “are anticipated to be in line with management expectations.” The software play anticipates reporting that revenues and EBITDA will have advanced 11% (to c.£6.9m) and 21% (to £c.1.1m), respectively, between October and March, when it announces its interim results for the half year in late May.

Cerillion — which provides software for billing, charging and customer relationship management (or CRM) — announced in recent weeks the signing of a $2.4m contract with an existing customer which Cerillion describes as “a multi-service communications provider in the Americas.”

The company provides services for a broad range of customers in established and emerging economies alike, and sales continue to pick up speed. Cerillion currently boasts 75 major clients across 40 countries, and I expect cutting edge products like its Cerillion Skyline package to keep sales spiralling higher.

On the precipice?

I am not so optimistic over the growth outlook of Vedanta Resources (LSE: VED), however. Sure, the share price may have added an extra 33% during the past month as commodity  prices have rallied. But as I have previously cautioned, the fundamental picture for the resources markets remains less than encouraging.

Vedanta Resources continues to hike production across its main markets to offset the impact of lower resources values. Indeed, the business churned out record amounts of copper cathodes, aluminium, electricity and silver during January-March, mirroring similar measures by many of the world’s major commodity producers.

But a drastic slowdown in Chinese economic growth raises serious questions over where exactly all of this excess material will end up.

Given this backdrop, I believe recently-revived commodity prices are in danger of experiencing a severe reversal, putting the share values of chargers like Vedanta Resources in equal peril.

The post Should You Buy Vedanta Resources plc, African Potash Ltd & Cerillion PLC Today? appeared first on The Twelfth Magpie.

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• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.