One sector in particular is the UK mining industry, which appears to be entering a fresh phase of growth.

After years of volatility, demand for key industrial metals seems to be rising again. This is likely due to increased infrastructure investment, the global energy transition, and resilient Chinese consumption. This renewed appetite for raw materials has sparked gains across mining shares, from blue chips to mid-caps.

Investors keen to capitalise on this trend may want to consider two mid-cap FTSE 250 mining companies that are helping fuel the resurgence: Ferrexpo (LSE: FXPO) and Atalaya Mining (LSE: ATYM).

An undervalued miner with strong fundamentals

Ferrexpo has delivered a 15.6% gain over the past month, more than any other major miner in the UK. With a market capitalisation of £391.2m, the iron ore pellet producer remains modestly sized, yet its valuation appears attractive. Its price-to-sales (P/S) ratio of just 0.53 suggests the stock is trading well below what investors are willing to pay for similar stocks.

Currently, it’s unprofitable, with an earnings per share (EPS) of -7p. Yet the company’s balance sheet remains a solid indication of promising performance. It holds £737m in equity, £84.5m in cash, and only £4m in debt — a remarkably low gearing level for a resource firm. This financial position provides it with the flexibility to weather commodity price fluctuations and potentially return to profitability should market conditions continue to improve.

As is common in mining, geopolitical risks are a key concern. Ferrexpo operates in Ukraine, and while recent operations have continued, the ongoing conflict in the region poses a persistent threat. Still, for risk-tolerant investors, the current share price could hold significant growth potential if iron ore prices remain firm.

Copping a copper comeback

Atalaya Mining is another FTSE 250 miner gaining traction, having seen its share price rise 14.6% in the past month. With a market cap of £585.5m, the Spanish-based copper producer is benefiting from renewed optimism around copper demand, particularly due to its role in electric vehicles and renewable energy infrastructure.

Atalaya has a moderate price-to-earnings (P/E) ratio of 22.71 — reasonable given its growth potential. Its balance sheet is also in good shape, with £428.7m in equity, £43.7m in cash, and just £17.8m in debt, allowing it to fund development projects and navigate market volatility.

While its valuation reflects some optimism, copper prices are notoriously cyclical and could be derailed by a global slowdown. Nonetheless, Atalaya appears well-positioned to benefit from the current demand and has strong operational leverage if prices rise further.

A growth driver in 2025?

The FTSE 250 is not the only index benefiting from this trend. A similar situation is mirrored in the FTSE 100, where larger miners like Antofagasta and Anglo American have also rallied over 10% in the past month. The broader mining sector is once again asserting itself as a pillar of UK market performance.

With global industrial demand picking up and investor sentiment shifting, mining could play a vital role in driving UK economic and stock market growth in 2025 and beyond.

The post These 2 mid-cap FTSE 250 miners are driving a UK stock market recovery appeared first on The Motley Fool UK.

Yet during this period — as far as I can see — there hasn’t been any good news to report. In fact, the opposite appears to be the case.

Cash flow problems

That’s because, on 17 April, the group said that the Ukrainian tax authorities are not going to settle its February VAT reclaim of $11.1m. It follows a similar decision to hold on to the $12.5m claimed for January. And the consequences are significant.

The group’s advised that the decision is “placing financial pressure on [its] liquidity and has forced a reduction in production to 25% of full capacity”.  

The suspension of the repayments is due to the imposition of personal sanctions on Kostiantyn Zhevago, the Ukrainian billionaire and largest shareholder in Ferrexpo. It’s believed that he controls just under 50% of the group’s shares. The company’s directors are keen to point out that the sanctions are personal in nature and that the group hasn’t been sanctioned in any way.

However, at this stage, it’s uncertain how – or when – the issue will be resolved. Therefore, it appears likely that future claims will also be suspended.

At 31 December 2024, Ferrexpo had $106m of cash on its balance sheet. I suspect it won’t take long for this to be depleted if the Ukrainian VAT continues to be withheld.

It’s a shame because the group claims to have reserves of over 5bn tonnes, which could keep it going for at least 50 years. It specialises in producing higher grades of iron ore. When used in the manufacturing process, this helps improve productivity and lower carbon emissions.

A confusing picture

However, given the uncertain backdrop, it makes the recent upward movement in the share price a bit of a mystery. Usually, concerns about a company’s liquidity would have the opposite effect.

But the share price rally could have something to do with the announcement that the long-awaited US- Ukraine minerals deal has been signed. I wonder if investors think this could lead to American (or other) investors launching a takeover bid. This seems unlikely to me. My understanding is that the agreement is about establishing an investment fund to discover new mineral deposits, not exploit existing ones.

Long-suffering shareholders will be delighted with the recent movement in the group’s share price. It will enable them to recoup some of their paper losses. Since May 2020, the group’s stock market valuation has fallen 41%.  

However, the present situation makes me nervous. Without any obvious reason to justify the movement, it looks as though some speculative investors are taking a position. This means the share price could fall as quickly as it’s risen. It’s just too risky for me.

For this reason, I’m going to watch from the sidelines and see how the situation unfolds.

The post This FTSE 250 stock’s up 40% in a week! What’s going on? appeared first on The Motley Fool UK.

The share price tumbled in March after it announced a surprise loss in its final results for 2024. Yet despite the steep fall, the company’s underlying performance has not been as dire as the market reaction might suggest. 

The question for investors now is whether this represents a buying opportunity — or simply a value trap.

Signs of improvement

Ferrexpo reported a £39.17m loss for its latest financial year. While this headline figure may seem discouraging, it came in 16.6% above earnings expectations, reflecting stronger-than-anticipated operational efficiency. Notably, the company’s net margin improved significantly — from -13% to -5.36% — suggesting better cost control and a potential turnaround in progress.

Another encouraging sign is the company’s solid balance sheet. It carries just £4m in debt while boasting £84.5m in cash reserves. This low leverage provides a critical buffer during challenging periods, particularly in the cyclical mining sector. In contrast to many heavily indebted peers, the miner has the financial flexibility to withstand further volatility in iron ore prices.

From a valuation perspective, the stock appears attractively priced. Its price-to-sales (P/S) ratio stands at just 0.85, well below the market average. This could signal an undervalued stock, particularly if margins continue to improve. Additionally, analysts’ average 12-month target price is 78.8p, representing a 58.3% increase from current levels.

A sombre outlook for 2025

Despite improvements, the outlook for 2025 remains uncertain. Analysts expect both earnings and revenue to decline further in 2025, reflecting weaker iron ore demand and logistical challenges. Any recovery in the share price is therefore likely to be gradual and dependent on stabilisation in commodity markets.

Adding to that are several risks to consider, such as volatile iron ore prices. These fluctuate based on demand from China, construction activity, and broader economic cycles. Miners like Ferrexpo are also exposed to unique operational risks such as production issues, safety concerns, and high fixed operating costs. These make it difficult to forecast earnings and provide accurate guidance.

In addition, the company operates in Ukraine, a region still facing considerable geopolitical uncertainty. Disruptions to transport infrastructure, export routes, and local supply chains remain a persistent concern. These issues are compounded by increasing scrutiny over its environmental impact, potentially ramping up future compliance costs.

A high-risk, high-reward prospect

Ferrexpo’s deep share price decline may have created an opportunity for contrarian investors willing to tolerate elevated risk. Its improving margins, strong balance sheet, and low valuation metrics make a compelling case for long-term recovery potential. However, with earnings expected to fall further in 2025 and significant sectoral risks still in play, caution is warranted.

For those with a high risk tolerance and a long-term investment horizon, it may be worth watching closely – but it is far from a sure bet. Until there are stronger signs of a resolution to the conflict in Ukraine, I don’t plan to buy the stock.

The post Down 53% this year! Should I buy the dip in this FTSE 250 mining stock? appeared first on The Motley Fool UK.

Long-term share price losses

I’m referring to Ferrexpo (LSE:FXPO). The business operates iron ore mines in Ukraine, making money from producing and selling iron ore pellets, which are used in steel production. Over the past year, the stock is up by 62%.

But wait, I referred to the company as being the most punished FTSE stock. This is because even though the share price is up over the past year, it’s down 71% since February 2022. This ties in with the start of the invasion of Ukraine by Russia.

The impact of the war on Ferrexpo has been high. It has severely disrupted its mining operations. The instability has led to operational challenges, reduced production, and heightened risks associated with conducting business in a conflict zone. In fact, Ferrexpo has been able to operate only one or two of its four pelletizing production lines over the past year.

Further, the company has recently been facing legal issues regarding potential illegal mining activities and environmental damage.

Given the impact of all of the above on the finances, I completely understand why the share price has fallen. But based on my outlook, I think the share price should be trading significantly higher.

A large potential catalyst

It’s clear that there’s renewed focus on striking a peace deal between Ukraine and Russia. President Trump has made this clear. I think that this will happen within the coming few months.

The impact of this should help to catapult the stock price higher. The business should be able to access more ports, as in the past, enabling exports to increase almost overnight. I’d expect more of the pelletizing production lines to come back on-line, allowing the output to increase to match export demand.

There will likely be a large-scale project to rebuild Ukrainian cities. I’d expect steel production to soar, with iron ore supplied from Ferrexpo, the logical source.

In short, I believe that the company could do very well later this year, if a deal is agreed. The main reason why I think investors are overlooking the stock is that they either don’t feel a peace deal will be done, or that they think Ferrexpo has been weakened so much that it won’t be able to get back to pre-war levels. I agree these are risks going forward.

Pulling it all together

Ultimately, I think there’s too much pessimism surrounding the mining stock based on what could happen in the future. As a result, I’m seriously thinking about adding it to my portfolio. Granted, it’s a high-risk idea, but for investors who agree with my thinking, it could be worth considering.

The post I think this is the most punished FTSE stock in the market right now appeared first on The Motley Fool UK.

Sadly, I missed out on this incredible gain. But as a potential investor, I’m interested to understand whether this strong momentum could continue. Should I consider this stock for my portfolio?

A year of progress

I think Ukrainian iron ore pellet producer Ferrexpo (LSE: FXPO) is best described as a risky investment. The company’s operations have been disrupted by the war with Russia. Among the problems it’s faced are higher costs, power shortages and lower iron ore prices.

However, 2024 was a year of major progress. Production rose by 66% to 6.89m tonnes and access to Black Sea ports improved for exports. Ferrexpo loaded 37 ships last year, up from just 19 in 2023.

The company is expected to report a 44% increase in revenue to $941m for 2024, together with a net profit of $43m. After two years of losses, it’s good to see the business returning to profit.

The company’s improved financial performance was reported with its half-year result in October, just ahead of Donald Trump’s win in the US presidential election. Since then, Ferrexpo’s share price has taken off, doubling in three months.

There seems to be a strong feeling in the market that the Trump presidency has increased the likelihood of a settlement between Ukraine and Russia. That would be likely to benefit Ferrexpo.

Are the shares still cheap?

Despite recent gains, the share price is still around 60% below the levels seen prior to the Russian invasion in February 2022.

One way to interpret this is that it reflects Ferrexpo’s production, which is running at around half pre-war levels of 11m tonnes per year. The main reason for this is that the company has only been able to run one or two of its four pelletising production lines over the last year.

If Ferrexpo could return to full operating capacity, production could potentially double. Revenue and profits would be significantly higher.

More normal operating conditions could see a return to the high profit margins and generous dividends that were the norm prior to the war. In my view, an outcome like this could make the shares look cheap at current levels.

However, Ukraine’s infrastructure has been badly damaged and there’s no way to know if or when the war will end. It’s not clear how easily Ferrexpo would be able to return to pre-war levels of production quickly.

Iron ore prices may also have further to fall.

My approach is to look at Ferrexpo as things stand today. And on that view, the shares don’t look cheap to me.

Broker forecasts for 2025 suggest earnings could fall to around three cents per share this year, due to lower iron ore prices. That puts the stock on a lofty price-to-earnings ratio (P/E) of 46. At this level, Ferrexpo shares are too expensive for me to consider buying.

The post This FTSE 250 share is up 95% in 3 months! Can it keep rising? appeared first on The Motley Fool UK.

So, why are they rising? Well, the stock market and bonds market, to some extent, priced in the likelihood of a Trump victory — the so-called ‘Trump Trade’. However, with the victory seeming secure, the market is now fully pricing in that victory and selling the ‘Harris Hedge’.

Broadly speaking, analysts have suggested that Trump’s proposed economic policies — deregulation and tax cuts coupled with promises to end the war in Ukraine and lower energy prices — will be good for stocks and better than Harris.

So, let’s take a closer look at four stocks shifting after the election.

Ferrexpo: the big mover

Ferrexpo (LSE:FXPO) is an Ukraine-focused mining company. I covered this one a lot two years ago when the war started, but interest in the iron ore producer dipped as the conflict endured.

However, the stock is up 21% since the start of trading on Wednesday, complementing gains from earlier in the week. The likely explanation is Trump’s claim he can bring an end to the war in Ukraine.

Nobody knows whether a negotiated settlement is truly possible or what Trump’s proposed deal would look like. However, an end to the conflict would likely be good for businesses and miners like Ferrexpo.

The business has survived throughout the war, but not without severe challenges. Ferrexpo has around 700 staff members serving with the Ukrainian Armed Forces, and to make matters worse, iron ore prices have recently fallen to their lowest levels since 2022.

Nonetheless, the company has suggested that proposed stimulus measures in China could be supportive for the iron ore price — China imports much of the world’s iron.

Bank of Georgia: it’s political

The Bank of Georgia is up 5% as I writeSH. The stock has been volatile in recent weeks as the country held a much-awaited and highly-contested election. Georgia’s election was won — despite allegations of corruption — by the incumbent Georgian Dream party.

So, why is the stock up? Well, the Georgian Dream party has been too close to Moscow for many in the West. As such, it’s possible that Georgia would benefit from improving relations between Washington and Moscow.

Banks typically reflect the health of an economy, and as such, that’s probably why we’re seeing Bank of Georgia stock rise.

Argo Blockchain: Bitcoin mining

Argo Blockchain is a UK-listed crypto mining firm. The stock was up 17% in morning trading on 6 November. Crypto investors are betting on a more favourable regulatory environment under Trump, which could potentially benefit companies like Argo Blockchain. The broader cryptocurrency market also rallied on the news.

BAE Systems: focus on defence

An end to the war in Ukraine could result in a meaningful reduction in near-term demand for munitions and weaponry, although Western nations would need to replenish stocks donated to Ukraine.

However, Trump has promised to make the US’s NATO allies pay for their own defence. And this could see European nations commit to long-running defence programmes. One beneficiary of this would be BAE Systems, Europe’s largest defence company.

The stock was up 5% in morning trading.

The post These 4 UK stocks skyrocketed after Trump’s election win! appeared first on The Motley Fool UK.

Lacking a unique angle

The first is CAB Payments (LSE:CABP). The stock is down 45% over the past year, after a large crash hit the share price almost a year back.

Late last year, the stock fell over 70% in a day after the business issued a warning on financials. The global payments provider revised revenue expectations lower, flagging up that “market conditions are compressing margins and reducing trading volume”.

If we fast forward to the H1 results that came out last month, the situation doesn’t seem to have improved much. Adjusted earnings came in at £18.7m, lower than the £40m from the same period in 2023. The company noted “lower revenue and higher operating expenses”.

I just don’t see how the payments firm is really unique in what it offers. Granted, it might be able to carve out a niche in facilitating payments in emerging markets. This could help the business to grow in the future. But in my view there are plenty of hurdles it needs to get over before I’d consider investing.

Falling production levels

Another company I’m concerned about is Ferrexpo (LSE:FXPO). The stock has fallen by 41% over the last year and is down 85% over the past three.

This is a sad case, as the Ukraine-based iron ore pellet producer has seen production levels fall through the floor since the invasion by Russia. In the latest quarterly report, it noted how only one to two pelletising lines out of four were operational during the period. Further, it has almost 700 employees currently serving in the military, again putting pressure on production capacity.

I am hopeful that the war will come to a peaceful end at some point. However, I don’t see any imminent signs of this. Therefore, I anticipate that Ferrexpo will continue to struggle, with production and revenue likely falling further in the coming year.

It also hasn’t been helped by the price decrease of iron ore. At the start of this year it was trading at $133 per ton, but now it’s at $105. This means that whatever is produced by Ferrexpo ultimately is being sold for a lower price than it could previously get on the open market.

I could be wrong here and if we get a surprise peace deal then Ferrexpo shares could rally sharply on the good news. Operating levels could jump materially in a very short period of time, helping to lift revenue. Yet I’m happy to sit this one out.

The post Why I’d need to be crazy to buy these 2 UK stocks right now appeared first on The Motley Fool UK.

As an example, consider a stock that jumped as much as 14% in morning trading today (31 July) after releasing its results for the first half of this year: Ferrexpo (LSE: FXPO). Its dividend history has been a rollercoaster, to say the least.

That is already obvious looking at the history of its dividend per share.

Created using TradingView

But dividend yield is a function of dividend per share and share price. Ferrexpo shares have lost three quarters of their value over the past five years.

The dividend yield chart is therefore even more dramatic than the one showing dividends per share.

Created using TradingView

That is right. The stock – now with a dividend yield of zero – had a high yield of over 20% in 2020.

What is going on – and could the yield ever get close to where it used to be?

High-risk stock

The clue to all this is the nature of Ferrexpo’s business. The miner makes its money from mining in Ukraine.

Even before the war in that country, this geographic concentration was a risk to profits in my view. Before Russia invaded Ukraine in February 2022, when the share had a high yield of 12%, I wrote, “I see a big risk with Ferrexpo’s business model. Not only it is it concentrated on iron alone… it is also focussed on production from a single complex of mines.”

That remains a key risk in my view. On top of that, another risk that has materialised since I penned those words is the war. On top of even that, there is a long-running legal dispute concerning a subsidiary’s contested ownership of key assets.

All shares have risks — but clearly Ferrexpo has lots.

Business proving resilient

Despite that, the company has actually performed fairly well given the dire circumstances under which it is operating.

Today’s interim results showed total commercial production up 75% on the same period last year and total sales up 85% to almost 4m tonnes. Revenues grew 64% to over half a billion dollars and profit after tax more than doubled to $55m. Ferrexpo has $112m in net cash.

Despite this resilience, the market capitalisation of the business is currently £370m. That reflects ongoing risks, not least the ownership dispute.  

Far too risky for me

The dividend remains suspended due to the legal dispute. If that is resolved favourably, the company could conceivably resume dividends even during wartime given the proven resilience of its business.

But the risks here are huge in my view.

Indeed, Ferrexpo recognises that its “ongoing legal disputes in Ukraine” could ultimately affect its ability to continue as a going concern. If that eventuality came to pass, the share price could fall even from here.

Ferrexpo is a good illustration of why a high-yield stock can end up being a costly investment, as the dividend gets axed and share price falls too.

I am glad I did not buy in when it was yielding over 20% — and have no plans to do so now.

The post This former high-yield share just jumped. Why? appeared first on The Motley Fool UK.

Troubles from war

Let’s start with the one I wouldn’t touch. It’s Ferrexpo (LSE:FXPO), the iron ore pellet producer. The stock is down 38% over the past three months, extending the 55% drop over the past year.

The firm has been in a sorry state, negatively impacted by the war in Ukraine. Given that the business has three iron ore mines and an iron ore pellet production facility in the country, operations have been extremely difficult.

To put the financial impact into perspective, back in 2021 the full-year revenue was just over $2.5bn. For 2023, this fell to $651m. It’s a huge drop, with the 2023 report stating that “our people and our
business continue to be severely affected”.

Although I’m not criticising the company, I don’t see how I can invest in the firm until we get a resolution to the war. Until then, I can only see the share price falling further.

Granted, I could be wrong, with the share price potentially rallying due to a significant boost to iron ore prices or some unexpected events.

A dip to consider

On the other hand, I do like Bridgepoint Group (LSE:BPT). Even though the stock is down 15% over the past three months, I think it’s a dip worth buying. Over the past year, the stock is up 8%.

There doesn’t appear to be any clear cut reasons behind the slide lower in recent months. True, the 2023 results that came out in March weren’t as strong as some might have expected. Profit was up 12% versus the previous year, which is still a solid performance in my eyes.

I do get that some investors don’t want to get involved in private equity and private credit right now. With the stock market being quite uncertain, having money tied up in private equity that can’t easily be sold for cash isn’t that appealing. Plus, with higher interest rates, the potential for default on credit can increase.

Even with these risks, the business is doing very well. In fact, assets under management (a key metric for growth) increased by 7% from last year, to hit $44.7bn. Given the size that the group has, spread with offices around the world, I think it’s very well placed to push on. When I zoom out, the picture is still rosy.

On that basis, I’m thinking about buying the stock for my portfolio shortly.

The post After sifting through the dogs of the FTSE 250, here’s what I found appeared first on The Motley Fool UK.

While most of its operations are largely outside the conflict zone, shipping via the Port of Pivdennyi has proven challenging. Supply chain disruption and logistical constraints have hit the share price hard this year, resulting in a 39% drawdown.

But a positive rating from Barclays last week followed by a decent earnings report two days later has given the price a boost. As markets opened on Monday (22 April), a rally began that added over 14% to the share price.

With the price still comparatively low, is this a cheap buying opportunity – or the start of a so-called sucker’s rally?

High risk remains

It’s difficult to gauge whether the price rally is the result of positive news regarding the conflict. US House representatives have passed a long-delayed $61bn military aid package to Ukraine. Russia responded with a promise to intensify attacks on storage bases for Western weapons. With Ukraine struggling to hold key defensive locations in the conflict area, there’s concern as to whether the aid package will arrive in time. 

In addition to the Russian threat, Ferrexpo faces legal challenges from the state prosecutor. In early March, the prosecutor issued a court order to freeze the company’s bank accounts on suspicion of illegal mining activity. Ferrexpo has claimed the case is without merit but put aside $131m to cover any related costs, contributing to a $85m pre-tax loss reported for 2023.

Potential for recovery?

Despite a dip due to the ongoing logistical issues, Ferrexo’s 2023 revenue came in higher than expected. This could be the result of restarting a pelletiser operation that’s been dormant, suggesting an increase in European iron ore demand. It also reportedly holds $108m in cash reserves, helping prop it up in the event of any unforeseen circumstances. 

Consensus estimates suggest the stock price is undervalued by around 77% based on future cash flows, with earnings expected to grow 116% per year going forward. But I’m unsure these small wins sufficiently outweigh the risks. The positive rating from Barclays is hardly a trend, with no other notable analysts highlighting the stock. 

In my opinion, no estimates can overshadow the increasingly daunting threat of a war that doesn’t look likely to end any time soon. Sure, I appreciate a good bargain as much as the next person but my risk tolerance isn’t that high. Until there is definitive evidence of a sustained de-escalation in the Ukrainian conflict, I wouldn’t risk my capital on Ferrexpo stock.

That’s not to say it isn’t a solid company with great financials. In any normal situation, I would probably rate its prospects highly. But right now, it’s hard to argue that the company is in direct control of its future.

The post Up 14% in a day! Is this embattled FTSE 250 company on the road to recovery? appeared first on The Motley Fool UK.