Recent data showed that China's economy expanded at its weakest pace in over two years, raising speculation that China may ease monetary policy to boost growth. This has led to a jump in commodities.
Many resources rely on Chinese demand to fuel its growth. This is why raw material stocks were initially hurt by the prospect of a hard larding in China. Now the logic goes, if Chinese officials try to boost spending to revive its growth, commodities may be first to benefit.
Consider that China is the world's top buyer of copper and the second biggest oil consumer (via Bloomberg).
"More and more market players believe that China will implement further monetary-easing measures," Eugen Weinberg, the head of commodity research at Commerzbank AG in Frankfurt, said today in a report. "This is giving considerable buoyancy to metal prices."
Business section: Investing ideas
Commodities have shown big gains over recent sessions, but will their winning streaks continue?
For ideas, we collected data on institutional money flows, and identified 10 commodity stocks that have seen significant institutional buying during the current quarter.
Big money managers have extensive resources to analyze investing ideas. So if they're buying a certain stock, it's worth paying close attention.
Do you agree with their bullish sentiment? Use this list as a starting point for your own analysis.
List sorted by market cap. (Click here for more interactive tools.)
1. Mosaic (NYSE: MOS): Engages in the production and marketing of concentrated phosphate- and potash-based crop nutrients for the agriculture industry worldwide. Net institutional purchases in the current quarter at 22.1M shares, which represents about 5.2% of the company's float of 424.91M shares.
2. Williams Companies (NYSE: WMB): Engages in finding, producing, gathering, processing, and transporting natural gas primarily in the United States. Net institutional purchases in the current quarter at 36.6M shares, which represents about 6.23% of the company's float of 587.29M shares.
3. YPF: Engages in the exploration, development, and production of crude oil, natural gas, and liquefied petroleum gas (LPG) in Argentina. Net institutional purchases in the current quarter at 5.1M shares, which represents about 7.96% of the company's float of 64.06M shares.
4. Kinross Gold (NYSE: KGC): Engages in mining and processing gold ores. Net institutional purchases in the current quarter at 36.0M shares, which represents about 3.19% of the company's float of 1.13B shares.
5. Marathon Petroleum: Engages in refining, transporting, and marketing petroleum products primarily in the United States and internationally. Net institutional purchases in the current quarter at 278.9M shares, which represents about 78.4% of the company's float of 355.73M shares.
6. Silver Wheaton (NYSE: SLW): Operates as a silver streaming company worldwide. Net institutional purchases in the current quarter at 18.0M shares, which represents about 5.1% of the company's float of 352.72M shares.
7. Peabody Energy (NYSE: BTU): Engages in the exploration, mining, and production of coal. Net institutional purchases in the current quarter at 8.8M shares, which represents about 3.26% of the company's float of 269.95M shares.
8. Energy Transfer Equity: Energy Transfer Equity, L.P., through its direct and indirect investments in the limited partner and general partner interests in Energy Transfer Partners, L.P., engages in midstream, intrastate, and interstate transportation of natural gas, as well as in storage of natural gas in the United States. Net institutional purchases in the current quarter at 5.1M shares, which represents about 4.62% of the company's float of 110.42M shares.
9. Baytex Energy: Engages in the acquisition, exploration, development, and production of petroleum and natural gas in the Western Canadian Sedimentary Basin and the United States. Net institutional purchases in the current quarter at 4.5M shares, which represents about 3.89% of the company's float of 115.72M shares.
10. Cimarex Energy: Operates as an independent oil and gas exploration and production company primarily in Texas, Oklahoma, New Mexico, Kansas, and Wyoming. Net institutional purchases in the current quarter at 3.3M shares, which represents about 3.95% of the company's float of 83.59M shares.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
List compiled by Eben Esterhuizen, CFA. Kapitall's Eben Esterhuizen and Rebecca Lipman do not own any of the shares mentioned above. Institutional data sourced from Fidelity.
