The Commodity Bulls are Back at Last

Loading...
Loading...

The Commodity Bulls are Back at Last

FN Media Group Presents OilPrice.com News Commentary

PR Newswire

LONDON, April 26, 2018 /PRNewswire/ --

The global commodities boom is coming back at last. After five or six years of chronic underinvestment and a surge in demand for everything from metals to minerals, commodity prices could be ready to explode. Mentioned in today's commentary include: Agnico Eagle Mines AEM, Pan American Silver Corp. PAAS, FMC Corp FMC, Freeport-McMoRan FCX, Tyson Foods TSN.

As a sector-wide supply crunch looms, miners and producers are likely to lag behind the commodities themselves - giving savvy investors a great opportunity to find undervalued plays.
Rising geopolitical tensions, soaring global population, and a recent spike in market volatility only add to the urgency. It is the perfect time for a bull run in what analysts are calling 'the best commodity market in over a decade.'

Here are five companies to follow as the global commodity boom accelerates.

1. Agnico Eagle Mines AEM

Gold has always been an investor favourite, and with geopolitical tensions growing and cryptocurrencies struggling to maintain investor attention, it isn't likely to lose that position any time soon.

Investors have seen some strong returns in 2018, and the market is showing no sign of slowing. And the bullish sentiment is understandable.

Bullion is set to wrap up its third quarterly gain for the first time since 2011, while ETF holdings are close to being at their highest point in half a decade. Exploration and mining companies such as Agnico Eagle Mines offer a great entry point into this market - often trading with a slight discount to gold prices themselves.

After a tough start to the year, Agnico Eagle Mines has rebounded in an impressive manner, and there is no sign of this momentum slowing. With a market cap of over $10 billion, this industry giant provides investors with a great low risk play on a market that is heading out of bear territory and becoming bullish once again.

Agnico Eagle Mines' stock is currently trading at $45.17 per share, the company has low debt and exceeded EPS expectations in each quarter of 2017. With plans to expand, the company is set to increase its gold production by 40 percent within the next three years, from 50,000 to 70,000 ounces per year.

2. Vatic Ventures (VCV) (VTTCF)

Potash is often overlooked in the world of commodities, but innovative investors are finally catching on.

As a core ingredient in almost all fertilizers, it plays a vital role in the global food market and is one of the most sought-after commodities in the world. Without it, the world could not produce enough food.
China and India rely heavily on potash for the cultivation of rice and palm oil, while Thailand, Indonesia, Malaysia and Vietnam make up 75 percent of the rest of Southeast Asia's consumption.

Potash prices are increasing, with 2017 prices at around 20 percent higher than in 2016. And production has been increasing at around about 3 percent per annum, with the current production rate sitting at 60 million tonnes (KCl).

The projected growth of the potash industry in South East Asia alone is around five percent per year over the next decade - and it is exploration and mining companies that could profit from this growth.

Enter Vatic Ventures (VCV, VTTCF), a company that anticipated the increase in demand for this essential commodity early on - and positioned itself right in the centre of South East Asia's demand boom - Thailand. Vatic is a Canadian company exploring and developing in the country, home to some of the world's largest untapped potash reserves.

In 2016, this innovative company acquired 80 percent of Saksrithai Developments Company, a Thai mining company that has a 100 percent interest in two promising potash prospecting licenses in Thailand.

These valuable licenses sit right next to what will soon be the first major potash project to go online in Thailand. Vatic is set to start exploration drilling in May 2018.

With its proximity to the Asian market and the incredibly shallow deposits typical in this area of Thailand (around 150-350 meters deep) compared to the industry average Vatic has the opportunity to produce this valuable commodity at up to a $60 per tonne discount to its competitors.

While Canada and Russia have dominated the potash market in the past, Thailand could be about to undercut these industry giants - and Vatic is looking to prove up a large potash resource in the heart of the action. Vatic (VCV) (VTTCF) is sitting on an opportunity that has great potential. Breaking into a market that has ready customers close at hand.

The potash boom in Thailand is poised to begin, and smart investors will be watching closely.

3. Pan American Silver Corp. PAAS

Silver typically lags behind gold when commodity booms begin, but it may well be heading out of this bear market early.

New technologies will require more silver. This includes the automotive sector, new solar-panel technology and medicine - using silver's anti-bacterial properties for bandages and catheters.

The forecast from the growth in demand for silver in the industrial sector is estimated at around 2 percent. With the demand for solar power technologies increasing by an estimated 20 percent over the last year.

Pan American Silver Corp. is one companies that is poised for profit in this valuable market, with the goal of being the world's pre-eminent silver producer. The company has a reputation for excellence in discovery, engineering, innovation, and sustainable development.

With seven mines based in Latin America, Pan American Silver is the world's second largest primary silver producer. The company is currently producing 25 million ounces of the precious metal each year, and this figure is set to increase in 2018.

Pan American Silver's revenue was up by almost 5.5 percent at $816.8 million in 2017 compared to $774.8 million in 2016. The company has a current market cap of $2.485 billion and has hugely decreased debt from $43.3 million in 2016 to just $10.6 million in 2017.

Because of the diversity of its commodities, consistent expansion in mining, and steady economic growth, most stock analysts awarded Pan American Silver with a stock status of 'buy' throughout last year.

With the demand for silver in new technologies continuously increasing, the question is whether Pan American Silver Corp. will be able to keep up.

4. FMC Corp FMC

The electric car boom, as well as the surging demand in energy storage units has sent lithium demand soaring in the last year and it is showing no sign of letting up.

At present, 95 percent of all rechargeable batteries use lithium. Accessing lithium sources proves difficult, as mining is costly and unpredictable, leaving commodity market analysts wondering who can meet the soaring demand.

Anticipated electric car production by market leaders such as Tesla relies heavily on lithium-based batteries. Unless lithium mining companies find a way to meet the necessary production levels, electric car manufacturers could find themselves fighting for whatever lithium supply they can get their hands on.

This is where FMC Corp. comes into the picture. It has been supplying lithium since initial demand by Sony for its first lithium batteries in the early 1990s. It is one of the largest specialty chemical suppliers in the world and is the third largest lithium chemical supplier. With a current market cap of $11.005 billion, it's set to remain on the centre stage for lithium production.

The company has mines in South America's 'lithium triangle', a region which contains 65 percent of all the lithium on the globe. It mines lithium at 95.5 percent purity, higher than any other lithium-mining company.

FMC Corp. has grown substantially over the last 7 years, with new plants in China and India, and expansion in Argentina, adding to their growing global network.

Revenue was set at $94 million, in the FMC lithium production sector, in the third quarter of 2017. This showed an increase of 35 percent on the previous year. While FMC has seen falling revenue in recent years, it may well have already reached its bottom and is set to continue this upwards trend.

5. Freeport-McMoRan FCX

Copper mining ties in closely with economic growth due to its diversity of use. It is a core material when it comes to infrastructure and relatively inexpensive compared to other options. Copper is generally used in construction, consumer products, electrical applications, transportation and industrial machinery.

New markets are opening up for copper production, including the automotive sector - for use in high efficiency motors and electric vehicles, and in the renewable energy sector - for wind and solar power.

CEOs and stock analysts are bullish on copper in 2018, and with both China and the U.S. poised to go on a building spree, the demand for copper is set to increase dramatically over the coming years. Freeport-McMoRan is a giant in this space, with a current market cap of $ 26.495 billion and its share price having risen dramatically from $12.47 in April 2017 to $19.24 today.

Freeport is expecting its copper shipments to increase by 5.4 percent in 2018. It plans to transition to underground operations in Grasberg, the second-biggest copper mine in the world, and to grow long-term production, seeing a sharp increase around 2021-22.

One other company poised to boom as the global trade war heats up:

Tyson Foods TSN It may seem counterintuitive for some to invest in a pork-producing stock at a time when Chinese import tariffs are wreaking havoc among U.S. producers, yet Tyson Foods stands out among the rest.

The $26 billion market cap company boasts a healthy forward price to earnings rate of 10.7, as well as a dividend yield of 1.7 percent.
By. Joao Piexe

**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY**

Forward-Looking Statements 

This news release contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this release include that the Thailand potash resource will prove as large and as high grade as hoped; that the potash reserves can be mined; that Vatic will have sufficient funds to develop the potash fields to the point of profitability; that the price for potash will rise; that the Thai project will be able to produce potash as currently scheduled; that Vatic's potash will enjoy lower costs to market; that Vatic's exploration and operating costs will be lower than other potash projects; that the potash when produced by Vatic will be high quality suitable for standard use; and that Vatic will be able to carry out its business plans. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that Vatic may not get Thai approval for its mining, production and sale/export of potash; Vatic may not be able to pay the costs of development; aspects or all of the property's development may not be successful, production of potash may not be cost effective as expected; there is substantial political risk in Thailand, which have the potential of harming production and assets or having assets expropriated; Vatic may not raise sufficient funds to carry out its plans, changing costs for extraction and processing; increased capital costs; the timing and content of upcoming work programs; geological interpretations and technological results based on current data that may change with more detailed information or testing; potential process methods and resource recoveries assumptions based on limited test work with further test work may not be viable; world potash prices may drop; the availability of labour, equipment and markets for the products produced; and despite the current expected viability of its projects, that the potash reserves are not proven or cannot be economically produced on its properties, or that the required permits to build and operate the envisaged facilities cannot be obtained. Currently, Vatic has no revenues. The forward-looking information contained herein is given as of the date hereof and the Company assumes no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.

DISCLAIMERS 

PAID ADVERTISEMENT. This communication is a paid advertisement and is not a recommendation to buy or sell securities. Oilprice.com, Advanced Media Solutions Ltd, and their owners, managers, employees, and assigns (collectively "the Company") has been paid by the profiled company or a third party to disseminate this communication. In this case the Company has been paid by Vatic ninety thousand US dollars for this article and certain banner ads. This compensation is a major conflict with our ability to be unbiased, more specifically:
This communication is for entertainment purposes only. Never invest purely based on our communication. Gains mentioned in our newsletter and on our website may be based on end-of- day or intraday data. We have been compensated by Vatic to conduct investor awareness advertising for VCV and Frankfurt: V8V2. Therefore, this communication should be viewed as a commercial advertisement only. We have not investigated the background of the profiled company. The third party, profiled company, or their affiliates may liquidate shares of the profiled company at or near the time you receive this communication, which has the potential to hurt share prices. Frequently companies profiled in our alerts experience a large increase in volume and share price during the course of investor awareness marketing, which often end as soon as the investor awareness marketing ceases. The investor awareness marketing may be as brief as one day, after which a large decrease in volume and share price is likely to occur.
We do not guarantee the timeliness, accuracy, or completeness of the information on our site or in our newsletters. The information in our communications has not been independently verified and is not guaranteed to be correct. The information is collected from public sources, such as the profiled company's website and press releases, but is not researched or verified in any way whatsoever to ensure the publicly available information is correct.

NOT AN INVESTMENT ADVISOR. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

INDEMNIFICATION/RELEASE OF LIABILITY. By reading this communication, you agree to the terms of this disclaimer, including, but not limited to: releasing The Company, its affiliates, assigns and successors from any and all liability, damages, and injury from the information contained in this communication. You further warrant that you are solely responsible for any financial outcome that may come from your investment decisions.

RISK OF INVESTING. Investing is inherently risky. While a potential for rewards exists, by investing, you are putting yourself at risk. You must be aware of the risks and be willing to accept them in order to invest in any type of security. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell securities.

DISCLAIMER: OilPrice.com is Source of all content listed above. FN Media Group, LLC (FNM), is a third party publisher and news dissemination service provider, which disseminates electronic information through multiple online media channels. FNM is NOT affiliated in any manner with OilPrice.com or any company mentioned herein. The commentary, views and opinions expressed in this release by OilPrice.com are solely those of OilPrice.com and are not shared by and do not reflect in any manner the views or opinions of FNM. FNM is not liable for any investment decisions by its readers or subscribers. FNM and its affiliated companies are a news dissemination and financial marketing solutions provider and are NOT a registered broker/dealer/analyst/adviser, holds no investment licenses and may NOT sell, offer to sell or offer to buy any security. FNM was not compensated by any public company mentioned herein to disseminate this press release.

FNM HOLDS NO SHARES OF ANY COMPANY NAMED IN THIS RELEASE.

This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "may", "future", "plan" or "planned", "will" or "should", "expected," "anticipates", "draft", "eventually" or "projected". You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company's annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and FNM undertakes no obligation to update such statements.

Media Contact
e-mail: editor@financialnewsmedia.com
U.S. Phone: +1(954)345-0611

SOURCE OilPrice.com

Loading...
Loading...
Market News and Data brought to you by Benzinga APIs
Posted In: CommoditiesSmall CapOpinionPress Releaseschemical
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...