Big Ben will be speaking again today, but investors should not expect any help from his comments today. For commodity investors we can look forward to the crude inventory numbers, but we expect little surprise there. What investors need to be concerned about is the fact that Greek issues are once again beginning to creep up into the headlines and that will not be good for commodity stocks if it becomes more widespread. That issue needs to be behind us and the Europeans need to resolve it once and for all. One must question the sanity of those who rip the band-aid off only to reapply and remove again and again and again and...well you get the picture.
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Oil & Natural Gas
Kodiak Oil & Gas (KOG) rose $0.39 (4.49%) to close at $9.07/share on volume of 9.3 million shares. Kodiak finally broke above the bit of resistance it had at the $8.80/share level and ran up to the next level at $9/share. Earnings are due out in early August and it will be interesting to hear how the infrastructure buildout is going and where they stand on production as well as production guidance going into the year end. The infrastructure will lower the cost of transporting the production and increase saleable production, as natural gas will no longer need to be flared. It is a small portion of production, as Kodiak is heavily skewed towards oil, but it should still give the top and bottom line a single digit boost moving forward.
Alpha Natural Resources (ANR) punished investors once again before rallying into the close later in the day. Shares finished down $0.02 (0.29%) to close at $6.83/share on volume of 13.5 million. The close does not tell the entire story as the stock was setting new 52-week lows during morning trading. We were surprised by yesterday's lack of a bounce after the sharp decline during Monday's session, but the rally into the close showed considerable strength.
Mosaic (MOS) was up $2.84 (5.13%) to close at $58.21/share after reporting good earnings which beat expectations yesterday. Volume of 10.3 million was over twice the three month average for the stock and we think that investors are once again finding the industry as a whole interesting. It is pretty early to say definitively at this point, however it sure does appear that the industry is turning the corner.
Potash Corp of Saskatchewan (POT) followed Mosaic's lead rising $1.28 (2.9%) to close at $45.36/share on volume of 8.1 million. We still think that if the shares can hold the $44/share level then we could test the next level of resistance of $48/share assuming the news flow from the industry remains as it has over the past few months and especially in recent weeks.
Thompson Creek Metals (TC) has come under intense pressure over the past few months. It was forced to dilute shareholders and issue debt to raise the money to finish the gold mine they are constructing and over the past week the shares have begun to set fresh 52-week lows. Volume has risen to 6.7 million shares as of yesterday's trading session and shares fell $0.19 (6.96%) to close at $2.54/share. Bringing projects online is never easy, especially for juniors, and more often than not it results in multiple delays, setbacks and capital financings (read dilution here). We used to like this one a lot, but these days it is hard to find many reasons to be bullish with the recent news flow.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.