Commodity prices may be rocky lately, but could this S&P/ASX 200 Index (ASX: XJO) mining share go higher?
The Nickel Mines Ltd (ASX: NIC) share price has dropped 12% in the past week. For perspective, the S&P/ASX 200 Resources Index (ASX: XJR) has slid 5% in a week.
Let's take a look at the outlook for this ASX 200 mining share.
Undervalued share
The Nickel Mines share price is undervalued, according to Fidelity Australian Opportunities Fund portfolio manager Kate Howitt.
In comments reported by the Australian Financial Review, Howitt said:
The company's output will roughly triple over the next few years, making it one of the few resources companies not needing commodity prices to do the heavy lifting of earnings growth.
The company's latest quarterly showed a great outcome on both production and margins; a few more quarterlies like that and the risk discount in the shares will be squeezed out.
The Nickel Mines share price jumped in late April amid the company's quarterly results. Nickel Mines shares leapt 6% on 28 April after the company reported record earnings before interest, taxes, depreciation, and amortisation (EBITDA) of US$81.7 million, an 18.7% rise.
The company also sold US$7,386 per tonne of nickel, a 22.5% increase on the previous quarter.
Nickel Mines shares were turbulent in March during the "nickel squeeze", as my Foolish colleague Zach reported.
However, on 24 March, the team at Bell Potter predicted the Nickel Mines share price could rise 40% in the next 12 months.
Nickel Mines share price snapshot
The Nickel Mines share price has climbed 6% over the past 12 months, but it has descended 22% year to date.
For perspective, the ASX 200 Resources Index has lost almost 4% in the past year but gained roughly 2% year to date. The benchmark ASX 200 has lost less than 1% over the past year.
Nickel Mines has a market capitalisation of about $3 billion based on the current share price.
