The South32 Ltd (ASX: S32) share price had a tough year in 2019 and is down 18.10% in the last 12 months.
But despite its troubles, could the Aussie mining group’s shares be in the buy zone to start 2020?
Why the South32 share price could be good value
In the first index rebalancing of the new year, South32 has bowed out of the ASX 20.
The Aussie mining group has made way for Newcrest Mining Limited (ASX: NCM), which has seen its share price rocket 34.17% higher in the last 12 months.
After being spun-off from BHP Group Ltd (ASX: BHP), the South32 share price has been under pressure in recent times.
The company was unable to shake weak earnings throughout 2019, which has given shareholders some headaches.
The diversified nickel, manganese, lead and silver miner saw earnings slump 18% in FY 2019. Weaker demand from China and lower nickel production are forecast for 2020, which hasn’t helped the South32 share price of late.
However, given the capital losses in the last year or so, the Aussie miner’s shares could be a value buy.
If we see a resolution to the US–China trade war in 2020, keep an eye on ASX shares with significant earnings from China. South32 could be in the box seat to increase trade volumes and therefore earnings in the latter part of the year.
With the US election looming in November 2020, President Trump may want to boost the US economy via a new trade deal ahead of November.
Should you buy in today?
For now, the South32 share price remains under pressure. However, investors can often do well by “buying the dip” with commodities shares.
The Aussie miner does give investors a 4.11% dividend yield and boasts a $13.55 billion market capitalisation.
Given the current valuation and technical environment, South32 could just be the best value ASX mining stock on the market, in my opinion.
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Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.