While Champion Iron Ltd. (ASX:CIA) stock fell nearly 4% on Monday, amid a broad market selloff, analysts believe at current levels the shares present a strong buying opportunity. Champion is now the most-recommended stock to buy on the ASX, according to TipRanks insights.
Champion Iron is an Australian-listed Canadian miner producing iron ore, which is a major input in the steelmaking industry. The company sells its ore to customers globally, and reported record production for its FY23 first-quarter. Its second-quarter production update is scheduled for 27 October.
Champion Iron is analysts’ top stock
The TipRanks Analysts’ Top Stocks tool offers a list of most-recommended stocks by the best-performing analysts. Champion has moved to the top spot as the most-recommended ASX stock to buy for investors with a long-term view.
Champion Iron sits within the Basic Materials sector, which houses the second-largest number of analysts favourite stocks after the utilities sector. Other top stocks in the Basic Materials sector include Bluescope Steel Limited (ASX:BSL) and Northern Star Resources Ltd (ASX:NST).
Champion’s rise to the top of most-recommended stocks chart follows heavy selling in the stock in recent months. Although Champion shares have climbed about 3% in the past three months, they are still down about 36% over the past six months.
Amid rising interest rates, recession fears have weighed on iron ore demand and price, with many investors worried a recession would diminish sales opportunities for suppliers of industrial inputs like Champion Iron.
Insiders buying the dip in Champion stock
Transactions by Champion directors and executives seem to confirm analysts’ belief that the steel stock has a bright future. TipRanks’ Insider Trading Activity shows that Insider Confidence Signal is currently Positive on Champion. Corporate insiders have purchased more than AU$26,000 worth of shares in the company in the past three months.
Bloggers are all-in on Champion
Champion stock is seeing favourable mentions on financial blogs. TipRanks data shows that financial blogger opinions are 100% Bullish on Champion, compared to a sector average of 72%.
Champion share price forecast
According to TipRanks’ analyst rating consensus, Champion stock is a Strong Buy based on six Buys and one Hold. The average Champion share price prediction of AU$7.46 suggests over 55% upside potential.
Concluding remarks
While recession fears continue to mount, Champion Iron’s geographically diverse customer base provides an opportunity for severe weaknesses in some markets to be offset by relative strength in other markets.
