Is Coal out of Steam?
October 8, 2008
As bad as it as been for many of the energy companies, its been even worse for the coal stocks on the way back down. Most of the major coal stocks are down over 50% from their highs since around the beginning of June. Much of this fall can be attributed to the violent swings in the price of the commodity itself, the rest of it deals with the premium at which the stocks trade due to their predicted earnings growth over the next 5-10 years. Read more
Why Was Crude Up Huge On Monday?
September 23, 2008
The trading at the New York Merchantile Exchange (NYMEX) on Monday turned from ordinary to absurd extremely quickly as oil had by far it’s largest one day nominal and percentage gain. I have now been covering the energy sector for more than two years but this was easily the most unbelievable trading day I have ever experienced. Crude oil opened the day at $104.55 and closed at $120.92 while hitting an intraday high of around $130.00. The trading became very volatile around 2:15pm that the NYMEX actually halted trading for about a minute because crude oil hit the one day stop out of a $10 Read more
Future of Soybeans Rests in Brazil’s Hands
September 18, 2008
It’s the most important crop in the world. Its price per bushel has skyrocketed over the past five years due to the evolving appetites of emerging nations, and limited acreage has only exacerbated the situation. Many investors have declared its recent action the formation of a bubble unfounded by fundamentals and merely the result of market speculation and low inventories depleted by government-sponsored energy mandates. I am not talking about corn- soybeans are the protagonist of this tumultuous agricultural commodities drama. Read more
Mid-Cap, Large Potential
September 15, 2008
I am not the first, nor the last, person to mention the sell off in commodities recently. Crude oil has now dropped below $100 a barrel and natural gas is down more than 40% off its twelve month high. No one can say when this slaughtering will stop and it is making more and more people wary of investing in stocks that are correlated with commodities. However, I have come across a company that has benefited from this rough time: Equitable Resources Inc [EQT: 35.96, +1.29 (+3.72%)]. A stock that has mirrored the movements of the sector as a whole over the last few months; Equitable is now cheap enough to be Read more
What’s Next for the Bulk Shippers?
September 12, 2008
Investors seeking wild volatility in recent months have been big fans of the dry bulk shipping sub-sector. The interest in these companies has exploded over the last year because of their unique relationship with commodities, the energy sector, and the materials sector. In most cases over the short and intermediate term commodity spot prices do not affect the supply and demand Read more
The Bullish Case for Natural Gas
August 20, 2008
Over the last month and a half commodities have had a sell-off so severe that it is safe to say we haven’t seen anything like this in a very long time. You would probably have to go more than 20 years backwards to find a downward move this sharp. It is understandable that investors become paralyzed by fear during downswings of 40%+ in such a short period of time but when looking through market history you can see that the greatest investors made their fortunes when everyone else was busy feeling sorry for themselves. Whenever this happens I find it extremely comical that CNBC’s anchors are yelling about how the ‘commodity play is now over.’ It seems to me that they are very good at buying high Read more
Are Commodities Down for the Count?
August 16, 2008
August has been a horrible month- or has it? I guess it depends on how you look at it. Commodities have been hammered in recent weeks as disappointing economic data indicates a global slowdown and rising inflation that is finally starting to make feverish consumers reconsider their expenditures. The dollar’s rally has caused the commodities sell-off. The dollar’s price action has forced many international participants out of commodities and shareholders are unloading anything related to the asset class. Some are even quick to sight the past eight-week performance as the end of the bull run for commodities. Why is it that weak economic data is good for the dollar, but bad for commodities?
Who Is To Blame For High Gasoline Prices?
July 25, 2008
With only the possibility of John McCain and Barack Obama, I would say that whose to blame for high gasoline prices has been the most played news story across every media network over the last month or two. The national average for gasoline peaked earlier this month around $4.11 per gallon or regular 87 octane and has recently come down to about $4.03 per gallon. This obviously is a stark increase from Read more
The International Gold Rush – A Commodity Poised for Growth
July 25, 2008
In a week marked by a furthered short-term collapse of oil and a stronger U.S. dollar, the gold market saw prices drop off by $40 to settle near $925 an ounce. Investors seem quick to point the finger at the commodities market, using any sign of weakness as a cause for a stock market rally, but is the gold rush of late actually winding down? Read more
Freeport Fails to Impress
July 25, 2008
Freeport McMoRan Copper & Gold [FCX: 28.22, +1.48 (+5.53%)] failed to impress as quarterly earnings dropped 14%. Thi
s is the second quarter in a row that they have not only missed Street expectations, but quarterly earnings dropped as well. In a stressful commodities market with energy concerns and financial woes looming over everyone’s head Freeport’s shares definitely paid the price for not meeting Street expectations. Read more
 
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