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The best defensive mining stocks to buy in a down market

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Globe editors have posted this research report with permission of Dundee Capital Markets. This should not be construed as an endorsement of the report's recommendations. For more on The Globe's disclaimers please read here. The following is excerpted from the report:

The recent unwinding of Chinese copper and iron ore collateralized financing deals has impacted copper and iron ore prices. Although we believe the "panic" is over, effects could linger a while longer but we believe that the commodity price correction is mostly baked into stocks prices and current levels represent a good entry point for the sector. This view is also supported by expectation of further Chinese fiscal stimulus. With that in mind we stress tested our 2014 & 2015 EBITDA, EPS and NAV estimates using copper prices of $3.00 and $2.75/lb (details below). Bottom Line: NSU, LUN and FM have emerged as "defensive" names (remember there are no such thing as a "defensive" name in a down market) while TKO, CS, CUM and to a lesser extent HBM are the "most levered" names (we consider these stocks to be less interesting until the short term "panic" dissipates).

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