This will not only be the case in the coming year, but for the rest of our lives. And when you factor in runaway inflation pushing up the price of crude oil and silver and other commodity prices, you can understand why these stocks are a good buy.
Make sure you own at least a few shares of each of these commodity companies because they are your best bets in profiting from these emerging trends:
CF Industries Holding Inc. (NYSE:CF) manufactures and markets nitrogen and phosphate-based fertilizers, which are critical for agricultural and industrial customers around the world. Because of high crop prices, the underlying fundamentals for CF Industries remains outstanding, and I would not be surprised if the company eventually is acquired by a big mining company — like the one that went after Potash (NYSE:POT) — because of its low price-to-earnings ratio, strong cash flow, sales and earnings growth.
EQT Corp. (NYSE:EQT) is one of the nation’s largest natural gas producers. There are three things that I love about this company: its 120-year history, its fully integrated supply chain and its impressive infrastructure. In the third quarter, production sales volumes shot up 51% compared with Q3 2010. This, in addition to increased midstream volumes, contributed to a 32% boost in total sales, which grew from $248.5 million last year to $328.5 million this year. This kind of consistent growth is excellent news for the company and for your profit potential.
Marathon Oil Corp. (NYSE:MRO) is coming off what sports teams would call a “rebuilding year.” The company smartly spun off its refining and marketing business — Marathon Petroleum Corp. (NYSE:MPC) — this past June. The separation of the two companies allowed MRO to focus on being an independent oil exploration and production company. However, the timing could have been better. The company split just as oil prices began to get very erratic, and it was impossible for analysts to get a handle on MRO earnings. I fully expect that this will work itself out in the quarters to come and that MRO will prove to be a very profitable energy play in 2012.
Silver Wheaton Corp. (NYSE:SLW) is experiencing steady sales and earnings growth thanks to high silver prices. The company is a “zigzag” stock in my portfolio because it acts as a hedge whenever silver and other commodity prices soar on bad economic news, such as all the fiscal problems in the euro zone. Plus, the analyst community is having a hard time estimating the company’s long-term contract for silver, but Silver Wheaton’s stunning sales and earnings are simply overpowering!
CPFL Energia S.A. (NYSE:CPL) is a major electricity provider in Brazil. CPFL distributes electricity to approximately 6.4 million customers. Brazil is one of the fastest-growing economies right now and, as it produces more, it is consuming more energy. This is great news for energy-sector plays like CPFL. The sector is known for mergers and acquisitions, so any rumors in this area would boost shares.