commodity investing

Article Index

Is Bill Ackman's Air Products Helium Bet Full of Hot Air?

Bill Ackman is trying to find a winner. Over the past two weeks, Wall Street kept its eye on one of richest and shrewdest hedge fund managers in the game.

Speculation about his target increased as he informed investors that he was seeking to make another splash in an "undervalued" company. And he certainly did, his biggest splash ever.

Ackman's recent $2.2 billion stake in Air Products & Chemicals Inc. (NYSE: APD) is certainly a buoyant pick. His Pershing Square Capital Management acquired a 9.8% stake in the industrial gas company, which is also the world's largest producer of helium and hydrogen.

It was a lofty bet by Ackman, who had garnered attention for a quiet accumulation of $1 billion in recent weeks. Earlier this month, Ackman told investors that he was specifically targeting a large-capitalization, investment-grade company with a lot of upside.

The purchase of APD could prove to be even shrewder, if Congress is unable to address the looming shortage of helium, a critical industrial gas in the production of MRI machines, semiconductors, aerospace equipment and lasers.

And Ackman can profit as demand continues to surge around the world.

To continue reading, please click here...

Why Investors Are Hoarding Silver

With the U.S. Federal Reserve failing to take monetary action a few weeks ago, silver prices saw an opportunity to deflate, but instead have held steady around $27 an ounce.

Investors' silver holdings are approaching record highs as speculators exit the precious metal and exchange-traded products with silver add to positions. In the last three months, these products' holdings have grown to a $16.2 billion value, reported Bloomberg News.

But they're poised to get even higher.

Analysts have forecast that silver will average $33.02 an ounce in the fourth quarter-an 18% rise from current prices.

Since last week silver has been increasing and closed up 0.35% to $28.00 on Friday.

So why are investors bullish on silver? There are a few reasons.

To continue reading, please click here...

Commodity Stocks: High Yields and a Hedge Against Inflation

For years now I've been pounding the table on two big themes...

The first is that income investing is a great way to boost not only your returns but your cash flow. And second, that every investor should have a substantial chunk of their portfolio invested in commodity stocks.

Here's the good news: it is perfectly possible to combine the two strategies, earning the benefits of both worlds.

In fact, in a moment I'll tell you about a few of my favorite high-yielding commodity stocks. Two of them pay safe, hefty yields over 7%!

Compare that to what you can earn with your local bank or with U.S. Treasuries. You'll quickly find there is nothing comparable.

In fact, by investing in income-producing commodity stocks, you get a steady stream of income along with the best possible protection against the ravages of inflation.

That combination is tough to beat. Let me explain...

The Best of Both Worlds: Income and Appreciation

The truth is, income investing is crucial for three reasons.

The first is obvious. No matter how well-off you become, the bills just keep getting worse and worse. I never met anyone that couldn't use more cash.

The next two aren't nearly as evident to most investors-- even though both are of the utmost importance to their portfolios.

Stocks that pay steady, consistent dividends add a measure of certainty to share prices. It's why top quality dividend stocks typically do well even in bear markets. Conversely, since earnings are so easily manipulated, companies with fancy bottom lines but no dividend usually turn out to be a scam and end up being priced accordingly when things turn south.

Finally, dividends themselves keep management honest (or fairly honest.) Cash that is paid out to shareholders cannot be used for grandiose expansion plans, or to pump up the stock price to help inflate top management's stock options.

As a result, companies that pay decent dividends are less likely to suffer value-destroying scams than those that don't and are likely to be around longer. For investors, that offers stability -- invaluable these days.

As for commodity stocks, I'll be the first to admit they are not a universal panacea. But two long-term factors currently favor them.

To continue reading, please click here...