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Energy and mining stocks are the cheapest for a decade and the investment case for the sector remains strong, according to JPMorgan Asset Management.

Ian Henderson, manager of JPMorgan's £1.9bn Natural Resources Fund, said there was a slew of buying opportunities in the sector's largest firms for savvy investors after the sector suffered from a dip in share prices.

Mr Henderson said it was a mistake to assume the current volatility in the sector was proof the commodity bull market had run out of steam. He said oil company earnings had outperformed expectations, for instance, although oil equities had risen slower than the oil price over the last 12 months.

Stuart Connell, fund manager at JPMorgan, said there was a long-term investment case, solid fundamentals and growth prospects underpinning commodities as a whole.

"There is definitely a lot of value out there in commodity stocks given the fall in share price. In the past month there have been more than six big attempted mergers and acquisitions from tier-one miners for tier-one projects. The buyers include Xstrata, Kinross Gold, Teck Cominco, Goldcorp, Inmet Mining and HudBay Minerals. This heightened activity highlights healthy demand in the sector," said Connell.

JPMorgan's research suggested the recent aversion to small caps, despite generating bumper returns over the last five years, was an opportunity to be exploited.

However, Ben Yearsley, investment manager at Hargreaves Lansdown, said the short-term volatility after a period of rising share prices made the sector a risky investment.

"There is still plenty of money to be made in mining and energy shares in the long term, but you have to treat the sector with a degree of caution," said Mr Yearsley.

"You should have these stocks in your portfolio, but I don't agree they are the cheapest for a decade. I would be more cautious. There are lots of funds that already have exposure to the likes of Rio Tinto and BHP Billiton without having to invest directly in the sector."

Mr Yearsley argued the peer group only seemed cheap because it had reported such record profits at a time when share prices are falling. He added emerging economies could be in line for a slowdown, which would hit commodity stocks.

But Mr Connell said the success of the commodities is linked to strong infrastructure growth in countries such as China and India.

For instance, JPMorgan's research found China needed to build at least 170 gigawatts of new coal power capacity from 2005-2010, accounting for 50 per cent of global consumption.