Ride the Next Big Commodity Wave Higher and Beat the Market With These 5 Stocks

With signs that the Chinese economy has begun to accelerate again, that would be a good thing for commodity stocks such as Teck Resources Ltd. (TSX:TECK.B)(NYSE:TECK) and four others.

Jason Phillips

Jason is a tried and true stock enthusiast who's been following the markets devotedly for the past five years. Jason enjoys learning about the unique role that businesses serve within our economy and how those businesses are able to use their strengths to tap into new and exciting opportunities that will enable them to grow bigger and stronger well into the future.

Published March 18, 2018 9:30 am EDT

The price of oil has rallied more than 20% since the start of October, and copper spot prices are up more than 40% since mid-way through 2016.

Following a very tough period, commodities are starting to rebound again, as the market adjusts to inflationary pressures and the U.S.’s new weak dollar policy.

These five companies should outperform the broader markets if recent strength in metals and mining stocks continue on their recent trend.

Teck Resources Ltd. (TSX: TECK.B)(NYSE: TECK)

I love the opportunity Teck’s shares provide, because simply put, if you get the timing right, you can make a lot of money with this company.

Teck’s stock is already up 38% since early November, but with encouraging signs that the Chinese economy has begun to regain its footing and is even starting to accelerate, Teck shares could still be in the early stages of a major rally.

Eldorado Gold Corp. (TSX: ELD)(NYSE: EGO)

Eldorado was my top stock pick for February, as October’s dramatic sell-off appears to have created a solid buying opportunity in what is one of the world’s lowest-cost gold producers.

There are signs that gold is starting to break out of its four-year lows, and if the price were to move higher, it would certainly be good news for Eldorado.

Crescent Point Energy Corp. (TSX:CPG)(NYSE:CPG)

It was hit or miss for Crescent Point for much of 2017, as it was never clear if the company would be able to sustain its 3.31% dividend payout.

But now, with the price of WTI crude oil above US$65 and showing no signs of slowing down any time soon, there is huge opportunity in this oil sands producer.

Nutrien Ltd. (TSX: NTR)(NYSE: NTR)

On January 2, the merger between Potash Corp. and Agrium officially became complete, and newly combined entity Nutrien became the world’s largest crop-nutrient company.

The merger is expected to generate cost savings of $500 million annually thanks to synergies between Potash Corp.’s production capabilities and Agrium’s retail distribution network.

With the global population continuing to rise, and more families joining the middle class in developing nations, Nutrien serves an essential need to the agricultural industry.

Kirkland Lake Gold Ltd. (TSX:KL)(NYSE:KL)

If you like the idea of investing in a gold producer, but you just can’t get comfortable with Eldorado’s latest dividend cut and the problems it’s facing with its Kisladag mine, you might want to consider Kirkland Lake instead.

In 2017, Kirkland Lake was one of the best performing gold stocks in the market, up more than 175% on the back of impressive production increases.

Kirkland shares continue to have a lot of momentum behind them, and if commodity prices continue on their current trend higher, there’s no reason to expect this will change any time soon.