Commodities: 'You Name It, We're Out Of It'

Summary

  • In December, inflation hit a 40-year high and in January, consumer prices rose to the highest level since 1982. We have three commodity stocks to inflation-proof your portfolio.
  • Raw materials are in short supply and inventories are depleted. Commodity stocks provide opportunity for investors to capitalize on costs that can be passed to consumers.
  • Commodities tend to be defensive investments during periods of inflation as their products are often in demand.
  • TRQ, AA, and SBSW are Strong Buys based upon our quant ratings, strong valuation frameworks, growing earnings, and pose to benefit from rising prices.
Valve to cut the gas pipeline gas. There is no gas. Oil and gas industry. 3D Render

Iván Jesús Cruz Civieta/iStock via Getty Images

Bullish On Commodities

There are several key drivers and supply pressures behind the rise in commodity prices:

  • Strong global market demand has resulted in many shortages of raw materials like aluminum, copper, gold, silver, palladium, and platinum.

  • Transportation shortages including

This article was written by

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Steven Cress is VP of Quantitative Strategy and Market Data at Seeking Alpha. Steve is also the creator of the platform’s quantitative stock rating system and many of the analytical tools on Seeking Alpha. His contributions form the cornerstone of the Seeking Alpha Quant Rating system, designed to interpret data for investors and offer insights on investment directions, thereby saving valuable time for users. He is also the Founder and Co-Manager of Alpha Picks, a systematic stock recommendation tool designed to help long-term investors create a best-in-class portfolio.

Steve is passionate and dedicated to removing emotional biases from investment decisions. Utilizing a data-driven approach, he leverages sophisticated algorithms and technologies to simplify complex, laborious investment research, creating an easy-to-follow, daily updated grading system for stock trading recommendations.

Steve was previously the Founder and CEO of CressCap Investment Research until its acquisition by Seeking Alpha in 2018 for its unparalleled quant analysis and market data capabilities. Prior to that, he had also founded the quant hedge fund Cress Capital Management, after spending most of his career running a proprietary trading desk at Morgan Stanley and leading international business development at Northern Trust.

With over 30 years of experience in equity research, quantitative strategies, and portfolio management, Steve is well-positioned to speak on a wide range of investment topics.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given that any particular security, portfolio, transaction or investment strategy is suitable for any specific person. The author is not advising you personally concerning the nature, potential, value or suitability of any particular security or other matter. You alone are solely responsible for determining whether any investment, security or strategy, or any product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation. Steven Cress is the Head of Quantitative Strategy at Seeking Alpha. Any views or opinions expressed herein may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank.

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