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Commodity Insights from LondonCommodity Insights from London

Frank Holmes — Tue, 13 Oct 2009 05:00:00 +0000

Brian Hicks, co-manager of our Global Resources Fund (PSPFX), is in London this week for the London Metal Exchangersquo;s 2009 Metals Seminar, which kicked off the annual LME Week gathering of leading commodities analysts from around the world. Here are Brianrsquo;s notes from the seminar: Danny Quah, professor at the London School of Economics, gave a compelling presentation that centered on China and the global recovery.nbsp; His main theme focused on the global economys shifting center of gravity, which has been steadily moving eastward to China over the past decade.nbsp;nbsp; He also mentioned that China isnt dependent upon U.S. consumption to create growth ndash; that notion is an old paradigm from the 1970s. Exports to the U.S. only make up approximately 15 percent of total exports, versus the 40 percent of total exports going to Southeast Asia.nbsp; Michael Jansen, director of commodities at JP Morgan, is one of a few who see a V-shaped recovery, given the rapid and unprecedented response to the financial crisis. Jansens Copper outlook: Imports to China may halve through the rest of the year, but should still remain at high levels.nbsp; Scrap is tight, but it has improved. Copper is the quot;bestquot; way to play the developed-markets recovery given a strong rebound in industrial production.nbsp; Risks to mine supply remain ndash; 3.7 million metric tons of production is up for contract negotiations in 2009. Jansens Aluminum outlook: While it is true there is too much inventory and capacity, Jansen still believes prices may go higher early in 2010 due to potentially large primary buying/restocking.nbsp; Fabrication demand should pick up due to low inventories. Jansens Nickel outlook: A bit of a pick-up in European stainless steel orders has been offset by a slowdown in China.nbsp; Xstrata has curtailed high cost nickel production and cut costs, bringing down its average cost to $3 per pound.nbsp; Despite a 20 percent cutback in mine supply, some people I met still think there is too much capacity and more cuts are needed.nbsp; Jansens Zinc outlook: Galvanized steel could pick up materially given that only 50 percent of global infrastructure projects are in place. Chinese auto sales also should be supportive for the zinc market.nbsp; We could see a 146,000 metric ton deficit in 2010. Jeffrey Christian, managing director at CPM Group (and author of ldquo;Commodities Risingrdquo;), highlighted that the lack of credit availability is the biggest risk to the recovery near-term, while slow growth in energy supply is the biggest risk longer-term. Please consider carefully a fundrsquo;s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting www.usfunds.com or by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Distributed by U.S. Global Brokerage, Inc. Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risk. Because the Global Resources Fund concentrates its investments in a specific industry, the fund may be subject to greater risks and fluctuations than a portfolio representing a broader range of industries. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. Holdings in the Global Resources Fund as a percentage of net assets as of 6/30/09: Xstrata 0.00% #09-713

Reliance Steel Aluminum Co.: Down But Not Out

Bullish Bankers — Sun, 21 Jun 2009 09:00:00 +0000

“Reliance Steel & Aluminum Co. [RS: 39.95, -0.05 (-0.12%)] is one of the largest metals service center companies in the United States. Though a network of more than 200 locations in 38 states, Belgium, Canada, China, Mexico, Singapore, South Korea and the United Kingdom, the Company provides value-added metals processing services and distributes a full [...]

Tiny Biotech (OCBM) Could Revolutionize Dental Surgery

Contrarian Profits — Tue, 04 Nov 2008 18:10:41 +0000

Laura Cadden has found a small cap biotech company with huge growth potential. OpenCell BioMed Inc. (OTC:OCBM) is hoping to revolutionize dental surgery using titanium to help fix implants. Laura says investors willing to take on a risky venture could win big with ‘early-mover’ profits.

Vortex Resources Corporation (VTEX.OB) is “One to Watch”

QualityStocks — Tue, 28 Oct 2008 20:49:24 +0000

Trading on the OTCBB, Vortex Resources Corporation is an emerging natural resources company. Their focus is on the acquisition, exploration, development, and production of oil, natural gas, and minerals. With current operations in West Texas, the Company’s objective is to find, acquire, and develop natural resources at the lowest cost possible. They then look to [...]

Banneker, Inc. (BANI.PK) is “One to Watch”

QualityStocks — Thu, 25 Sep 2008 20:45:25 +0000

Headquartered in Denver, Colorado, Banneker, Inc. is a manufacturer and distributor of quality watches and fine jewelry. Trading on the Pink Sheets, the company bases their products on the legend of Benjamin Banneker. Benjamin Banneker made the first fully assembled clock in America, entirely out of wood. In honor of him, Banneker Inc. makes all [...]

Metalico Inc. – Timely Buy of the Week

Tracey Ryniec — Thu, 04 Sep 2008 00:00:00 +0000

Metalico, Inc. (MEA), the scrap metal processor with 20 recycling facilities across the United States, reported the strongest quarter in the company's history as soaring metal prices hiked revenues by 342%.

The company, a Zacks #1 Rank (Strong Buy), operates in two segments: ferrous and non-ferrous scrap metal recycling and lead fabrication.

It is the scrap metal recycling segment which is spurring the company's growth. In the second quarter, volumes rose 185% for ferrous and 93% for non-ferrous metals year-over-year.

Prices have skyrocketed. In the second quarter, ferrous metal prices increased 126% and non-ferrous soared 215% quarter-over-quarter. The largest source of non-ferrous revenue in the quarter was in the Platinum Group Metals (PGM).

Metalico Cautions About The Third Quarter

MEA obviously operates in the highly volatile commodities sector and is susceptible to price fluctuations. For the third quarter, the company expects ferrous metal pricing to remain near record levels with both international and domestic demand expected to remain strong but pricing has been volatile in recent days.

The company said at the end of July that non-ferrous prices were settling into a trading range lower than that of the first half. It expects sluggish third quarter pricing for stainless steel and copper and steady prices for aluminum.

Platinum Group Metal prices are off their record levels in the first part of the third quarter, but the company believes they'll settle into a narrow, but lower, trading range.

Metalico is still in an expansionist mode. It hopes to complete at least one more acquisition before the end of 2008.

Consensus Estimates Rising for the Year

As would be expected coming off the best quarter in the company's history, covering analysts have been raising estimates for both the third quarter and the full year. For the third quarter, consensus estimates are up 2 cents in the last 30 days to 33 cents from 31 cents per share.

For the full year, estimates have jumped 12 cents to $1.22 from $1.10 in the last month

Additionally, analysts expect sales to grow 55.42% year-over-year.

Solid Fundamentals

Metalico has surprised on estimates 3 out of the last 4 quarters by an average of 30.46%. It has an excellent one year return on equity (ROE) of 22.09%. MEA's forward P/E is only 9.54.

"MLAO" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Metalico Inc. – Zacks Elite Stock of the Day

Tracey Ryniec — Thu, 04 Sep 2008 00:00:00 +0000

The company, a Zacks #1 Rank (Strong Buy), operates in two segments: ferrous and non-ferrous scrap metal recycling and lead fabrication.

It is the scrap metal recycling segment which is spurring the company's growth. In the second quarter, volumes rose 185% for ferrous and 93% for non-ferrous metals year-over-year.

Metalico Cautions About The Third Quarter

Platinum Group Metal prices are off their record levels in the first part of the third quarter, but the company believes they'll settle into a narrow, but lower, trading range.

Metalico is still in an expansionist mode. It hopes to complete at least one more acquisition before the end of 2008.

Consensus Estimates Rising for the Year

For the full year, estimates have jumped 12 cents to $1.22 from $1.10 in the last month

Additionally, analysts expect sales to grow 55.42% year-over-year.

Solid Fundamentals

Metalico has surprised on estimates 3 out of the last 4 quarters by an average of 30.46%. It has an excellent one year return on equity (ROE) of 22.09%. MEA's forward P/E is only 9.54.

"MLAO" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Ferro Corporation’s (FOE) Materials Facilitate Performance

QualityStocks — Fri, 29 Aug 2008 15:34:21 +0000

You know when your sales for 2007 are $2.2 billion that you’re doing something right. That’s the case for Cleveland, Ohio based Ferro Corporation who garnered those kinds of numbers last year. Trading on the New York Stock Exchange (NYSE), Ferro is a worldwide supplier of technology-based performance materials for manufacturers. They are part of [...]

Terra Nostra Resources Corp. (TNRO.OB) Completes Joint Venture Funding Requirements, Plans Aggressive Growth in Vertical Stainless Steel and Copper Manufacturing

QualityStocks — Fri, 29 Aug 2008 14:27:13 +0000

When investing in China, one only needs to understand a few key elements to succeed. The primary element is business fundamentals; the next is the use of political party power. Put the two together and an investor will soon understand that the entire concept of the Chinese transformation to a semi-capitalistic system rests in the [...]

Terra Nostra Resources Corp. (TNRO.OB) Completes Joint Venture Funding Requirements, Plans Aggressive Growth in Vertical Stainless Steel and Copper Manufacturing

QualityStocks — Fri, 29 Aug 2008 14:27:13 +0000

Scrap Metal Prices on the Rise

Jim Kingsland — Mon, 09 Jul 2007 15:42:16 +0000

There are a variety of media reports this weekend exploring the issue of thieves who are absconding with beer kegs and taking them to scrap metal yards where they can receive upwards of $50 for an empty keg. One report discussed how some manhole covers have even disappeared. Manhole covers fetch around $20. Thefts of [...]