(3:00) - Breaking Down Oil’s Current Performance: What Should Investors Expect Going Forward? (11:50) - The Smart Metal: What Is Copper Telling Us About The Economy? (16:35) - Is Steel A Good Long Term Investment? (20:40) - What Should Investors Know About Chicken: The Wing Stop Story (28:40) - What Commodity Trends Should You Be Keeping On Your Radar? (32:15) - Episode Roundup: PXD, RRC, ROCC, APA, FANG, LNG, FCX, SCCO, CLF, NUE, WING, GDX, GDXJ Podcast@Zacks.com
Welcome to Episode #350 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week, Tracey tapped the knowledge and expertise of the editor of the Zacks Commodity Innovator newsletter, Jeremy Mullin, to take a deep dive into what is going on in commodities in 2023. In 2022, commodities went on a wild ride as the Ukraine War caused many commodities to spike higher. Some, like oil, traded at 10-year highs.
But many of those commodities have since fallen back to pre-Ukraine War levels. Are there buying opportunities in some of those stocks?
5 Commodity Stocks to Watch in 2023 1. Cheniere Energy ( LNG Quick Quote LNG - Free Report)
Cheniere Energy is a large-cap liquid natural gas producer headquartered in Houston. Earnings are expected to jump 165% in 2023 to $14.95 from $5.64.
Shares are up 22% over the last year and have recently rallied 6.6% in the last 5 sessions. Cheniere is cheap, with a forward P/E of just 10.6.
Cheniere also pays a dividend, currently yielding 1%.
Should a liquid natural gas producer like Cheniere be on your watch list?
2. Freeport-McMoran ( FCX Quick Quote FCX - Free Report)
Freeport-McMoran is a copper producer. Copper prices came down from their Ukraine War highs but are now back over $4.00 per pound again.
Shares of Freeport-McMoran are down 13.4% over the last year but in 2023, they have rallied 8%. Freeport is trading at 20x forward earnings. It pays a dividend yielding 1.5%.
Is it time for copper and Freeport-McMoran in 2023?
3. Southern Copper Corp. ( SCCO Quick Quote SCCO - Free Report)
Southern Copper is a large cap copper producer. The Zacks Consensus Estimate for 2023 is calling for $3.40, which is down only a penny from 2022’s earnings of $3.41.
Shares of Southern Copper have rallied 22.3% year-to-date. It trades with a forward P/E of 21.
But many investors like Southern Copper because of its generous dividend, which is currently yielding 4.8%.
Should Southern Copper be on your commodities stock short list?
4. Cleveland-Cliffs Inc. ( CLF Quick Quote CLF - Free Report)
Cleveland-Cliffs is the largest flat-rolled steel producer in North America.
Shares of Cleveland-Cliffs are up 33% year-to-date but are still cheap, with a forward P/E of 12.9. Earnings are expected to fall 47.5%, however, to $1.60 from $3.05 last year.
Cleveland-Cliffs is one of Jeremy’s favorite steel stocks.
Should Cleveland-Cliffs also be on your short list?
5. Wingstop Inc. ( WING Quick Quote WING - Free Report)
Wingstop operates 1950 locations worldwide. How did a restaurant chain get into a podcast about commodities? Chicken wings. The price of chicken wings has come down from 2022 highs which is boosting Wingstop’s margins.
Shares of Wingstop are up 24.7% year-to-date. It’s not cheap, with a forward P/E of 91. Jeremy believes it can grow into the valuation, however.
Wingstop does pay a dividend, currently yielding 0.4%.
Is Wingstop a hidden commodities stock in 2023?
What Else do you Need to Know About Commodities in 2023?
Listen to this week’s podcast to find out.