What happened
Markets are headed south again this morning, reversing course from yesterday's rebound. Turquoise Hill Resources (TRQ), however, is bucking the trend and ripping higher. To the delight of investors, the copper producer provided encouraging news regarding its operations in Mongolia yesterday, while some positive coverage from Wall Street is providing additional cause for investors' exuberance.
As of 11:30 a.m. ET on Tuesday, shares of Turquoise Hill had soared 16.5%.
Image source: Getty Images.
So what
No longer dealing with uncertainty about the company's core asset, investors learned yesterday that Turquoise Hill and the Government of Mongolia have reached an agreement, including the company's decision to waive $2.4 billion in the nation's debt related to the Oyu Tolgoi mine. In addition, Turquoise Hill announced that Oyu Tolgoi's board of directors has approved the start of blasting activities, a step toward developing the underground mine. Moreover, Turquoise Hill stated that it has reached a "comprehensive funding arrangement" for Oyu Tolgoi with its partner Rio Tinto (RIO -0.41%).
Wall Street also took notice of Turquoise Hill's news. Canaccord, for example, upgraded the stock to buy from hold today and hiked the price target to 28 Canadian dollars ($22.20) from CA$21. Similarly, TD Securities raised the stock to speculative buy from hold while raising its price target to CA$28 from $CA24.
Now what
Since Oyu Tolgoi is the only producing asset that Turquoise Hill operates, it's no surprise that the market is reacting so bullishly today. But with the increased clarity regarding the asset's future, investors seeking copper exposure shouldn't necessarily rush to pick up shares today. There are several copper-focused stocks that investors can dig into, helping them to determine whether Turquoise Hill is the right choice for them.
