Five Commodity Investments to Buy as Putin’s Predatory Predilections Imperil Peace

Paul Dykewicz

Five commodity investments to buy offer opportunities to profit from Russian President Vladimir Putin’s predatory predilections that led him to order the invasion of neighboring Ukraine at the expense of his soldiers’ lives and his nation’s economy.

The five commodity investments to buy include uranium, aluminum and steel stocks, along with a diversified metals and mining fund. All five of the commodity investments to buy are positioned to profit from Putin’s willingness to pass up continued peace to pursue war that led the pro-Kremlin Russian tabloid Komsomolskaya Pravda to report on March 22 that 9,861 Russian soldiers have been killed and 16,153 wounded.

Even though the numbers were removed from the newspaper’s website later with a claim that the website was hacked, the estimates are akin to forecasts from the U.S. government. The United Nations reported that Ukraine has suffered 953 civilian deaths, including 78 children, from Russia’s continuing attack that began Feb. 24.

Sanctions Against Russia Lift Outlook for Five Commodity Investments to Buy

The U.S. government has taken action to ban imports of Russian oil, liquefied natural gas (LNG) and coal, but four Republican U.S. senators are calling for uranium to be added to the list. Both Wyoming Sens. John Barrasso and Cynthia Lummis joined with Sens. Kevin Cramer, of North Dakota, and Roger Marshall, of Kansas, last Thursday, March 17, to submit a bill to ban Russian uranium imports. 

That legislation is awaiting a companion bill in the House that would propose similar action, said Scott Melbye, executive vice president at Corpus Christi, Texas-based Uranium Energy Corporation (NYSE: UEC). Democrats, Republicans and environmentalists seem to be supporting nuclear power more strongly than in the past, he added.

Investors should be pleased to learn that on January 31, 2022, UEC repaid the final $10 million balance of its secured credit facility to become completely debt-free. In addition, as of Feb. 2, UEC held approximately $125 million of cash and liquid assets. 

UEC is One of Five Commodity Investments to Buy Amid Putin’s Perilous Policies

Amir Adnani, UEC’s president and chief executive officer, said the company had successfully executed its strategy to grow UEC’s resources and production capacity while improving its financial flexibility. The goals were achieved through the accretive acquisition of Uranium One, amassing one of the largest physical portfolios of U.S. domiciled uranium and an enhanced balance sheet.

UEC completed its definitive share purchase agreement with Uranium One Investments Inc., a subsidiary of Uranium One Inc., to acquire all the issued and outstanding shares of Uranium One Americas, Inc. (U1A) for a total purchase price of $112 million in cash, plus $2.9 million in estimated working capital and the assumption of $19 million in reclamation bonds.

UEC Chairman and former U.S. Energy Secretary Spencer Abraham said the acquisition will speed the development of domestic uranium production that can supply U.S.-produced uranium to serve America’s needs.  The purchase of the assets will increase U.S. uranium production capabilities and, by returning them to U.S. ownership, strengthen America’s energy and national security.

Chart courtesy of www.stockcharts.com

U.S. Reduces Dependence on Uranium from Russia, Kazakhstan and Uzbekistan 

The United States relies on Russia, Kazakhstan and Uzbekistan to obtain 50% of its uranium inputs, Melbye said. Plus, 25% of U.S. uranium enrichment services come from Russia.

There are 1 billion pounds of known and likely uranium resources in the Western United States, according to the U.S. Geological Survey. Rather than using those resources, the United States is sending $1.3 billion to Russia annually for uranium purchases, Melbye said during an exclusive interview. 

“These uranium fuel purchases go directly to state-owned Russian companies that help to finance the country’s war against Ukraine,” Melbye said. 

Cameco Is Second of Five Commodity Investments to Buy for Profiting 

Canada’s Cameco Corporation (NYSE: CCJ), the world’s largest publicly traded uranium company, nearly rose 7% on Monday, March 21. The Saskatoon, Saskatchewan-based company is benefitting from a $5 jump in the price of uranium, equaling 10%, to reach $55 during the past two weeks.

The stock, a current recommendation of the Fast Money Alert trading service, is up 17% in the past week after Putin threatened the use of the “nuclear option” in the war in Ukraine. Nuclear energy is also the best alternative energy source available, co-editors Mark Skousen and Jim Woods wrote in the trading service.

Uranium and other commodities traditionally are safe havens during wars, Skousen further wrote in the April 2022 edition of his Forecasts & Strategies investment newsletter. Skousen, who also leads the Home Run Trader, TNT Trader and Five Star Trader services, said traditional inflation hedges have consisted of oil, gold, silver, copper, uranium and other commodities.

Mark Skousen, editor of Forecasts & Strategies and a descendant of Benjamin Franklin, meets with Paul Dykewicz.

Paul Dykewicz meets with Jim Woods, who leads the Successful Investing and Intelligence Report trading services.

“Nuclear power is clean, and it is safe,” Secretary of Energy Jennifer Granholm told Iowa Public Radio during an interview on July 29, 2021. “It currently provides 55% of the clean energy that we use in this country.” 

The United States has announced a goal to cut up to 52% of its greenhouse gas emissions by 2030. At the same time, the global demand for nuclear power is rising, as more countries commit to net-zero carbon goals.

Chart courtesy of www.stockcharts.com

Pension Fund Chief Prefers PICK to Profit from Putin’s Predatory Predilections

Bob Carlson, a pension fund chairman who also heads the Retirement Watch investment newsletter, said he prefers to invest in metals and mining through iShares MSCI Global Metals and Mining Producers (PICK). Carlson added the exchange-traded fund (ETF) as a recommendation last fall and has seen it soar by double-digit percentages.

PICK is up 8.32% in the past month, 19.71% for the last three months, 17.67% so far this year and 29.16% in the past 12 months. The ETF tracks an index of global mining companies that excludes gold miners. 

Chart courtesy of www.stockcharts.com

The index consists of 216 stocks, but its capitalization-weighting means 50% of the fund is in its 10 largest positions. Leading holdings recently were BHP Group Ltd. (NYSE: BHP), Rio Tinto Limited (OTCMKTS: RTNTF), Vale S.A. (NYSE: VALE), Freeport-McMoRan Inc. (NYSE: FCX) and AngloAmerican plc (OTCMKTS: NGLOY).

Carlson Chose PICK Well Before Putin’s Invasion of Ukraine

“I was attracted to this ETF even before the invasion of Ukraine,” Carlson commented. “The mining companies had gone through a long bear market. They worked to reduce debt and otherwise clean up their balance sheets. Their more efficient operations mean most of them can profit at relatively low prices for their commodities and will earn strong profits as prices rise. The strong global demand, combined with the recent supply shocks, make them more attractive.”

Bob Carlson, head of Retirement Watch, speaks with columnist Paul Dykewicz.

Roughly 23% of the fund is in North American-based companies. Other leading regions in the fund are the United Kingdom, 13%; Developed Europe, 9%; Emerging Europe, 4.9%; and Africa/Middle East, 4.9%.

Alcoa Ranks as Fourth of Five Commodity Investments to Buy 

Pittsburgh-based Alcoa (NYSE: AA), America’s largest aluminum producer, indicated it will stop selling products to Russian companies and also halt buying raw material in response to the invasion of Ukraine. By doing so, Alcoa became the first major aluminum producer to stop conducting business with Russia.

Aluminum has risen in price recently to reach $1.71 per pound.

Roy Harvey, CEO of Alcoa, wrote a letter to his employees that called Russia’s invasion of Ukraine “deeply troubling” with the “devastating” loss of life, according to media reports. 

“Our hearts break for all Ukrainians who are suffering from this unprovoked conflict,” Harvey wrote in the letter. “In response to the current aggression, Alcoa will cease buying raw materials from, or selling our products to, Russian businesses.”

Perry Picks Alcoa among the Fourth of Five Commodity Investments to Buy

Alcoa boasts that it invented the aluminum industry in 1888 and continues to innovate with new technologies and processes. For example, it has one of the world’s largest bauxite mining portfolios, features a global alumina refining system, operates an aluminum smelting network, offers a cast products network, features a flexible energy portfolio and seeks to maximize synergies.

“Commodity prices have increased across the board this month, meaning that the inflation data for March, when it is reported, will likely show an annual rate above February’s 7.9% report,” Bryan Perry wrote to his Cash Machine investment newsletter subscribers on March 22.

With the Fed not scheduled to meet until mid-May, it is possible an intra-meeting rate hike of 25-50 basis points may be adopted to address the upward pressure that inflation is putting on the cost of goods and services, Perry predicted. 

“I think the market is likely to level off after this snapback rally, unless there is a ceasefire in Ukraine,” Perry continued.

The prospects of a ceasefire seem dim with Putin’s orders for his troops to decimate hospitals, schools and residential areas where civilians are taking shelter starting to receive international outrage. Putin’s actions have caused so many civilian deaths and injuries that U.K. Prime Minister Boris Johnson, U.S. President Joe Biden and key European Union leaders have accused the Russian leader of “war crimes.”

The International Criminal Court in the Netherlands is seeking evidence of potential war crimes in Ukraine ordered by Putin, but Russia does not recognize the tribunal’s jurisdiction. 

Paul Dykewicz interviews Bryan Perry, who heads the Cash Machine newsletter.

The United Nations estimated on March 22 that Russia’s attack against Ukraine that began on Feb. 24 has forced more than 10 million people, or more than a quarter of the beleaguered population, from their homes. 

Reliance Steel Becomes Fifth of Five Commodity Investments to Buy

Michelle Connell, a former portfolio manager who now is the president and owner of Dallas-based Portia Capital Management, said she likes a stock that would be safer pick as a commodity/metal company that has strong fundamentals and is not dependent on Russia for its ore.

Michelle Connell, CEO, Portia Capital Management

Alcoa is fundamentally not a strong earnings or revenue producer before Russia’s attack of Ukraine, said Connell, who also noted the company uses non-domestic metal sources.

Instead, Connell said she favors Los Angeles-based Reliance Steel and Aluminum (NYSE: RS), a diversified metal solutions provider and the largest metals service center company in North America that operates a network of about 300 locations in 40 states and 13 countries outside of America. The company is generating “strong revenue growth,” with a return on equity (ROE) of 25% and return on assets (ROA) of 14%.  

The company is experiencing strong demand from aerospace and semiconductors, Connell continued. RE’s sources of metal are domestic and they have leverage as the mills’ largest customer, she added.

Her price target for Reliance Steel and Aluminum is 30% higher from this point. The company provides value-added metals processing services and distributes a full-line of more than 100,000 metal products to 125,000-plus customers in a broad range of industries.

Reliance focuses on small orders with quick turnaround and increasing levels of value-added processing. In 2020, Reliance’s average order size was $1,910, approximately 49% of its orders included value-added processing and about 40% of the orders were delivered within 24 hours.

Chart courtesy of www.stockcharts.com

COVID-19 Cases Nearly Hit 475 Million Worldwide and 80 Million in America

COVID-19 has led to a new, highly contagious subvariant of Omicron, BA.2, that has spread a new wave of infections in Europe. The virus remains a factor for businesses worldwide, as well as in China, which is suffering its worst outbreak since the virus surfaced in Wuhan. COVID cases also are on the rise in European countries such as Germany, the Netherlands and Switzerland.

COVID-19 deaths worldwide exceeded 6 million to total 6,098,854 on March 23, according to Johns Hopkins University. Cases across the globe have soared to 474,132,151.

U.S. COVID-19 cases, as of March 23, hit 79,803,621, with deaths rising to 973,266. America has the unenviable status as the nation with the most COVID-19 cases and deaths.

As of March 23, 254,925,941 people, or 76.8% of the U.S. population, have obtained at least one dose of a COVID-19 vaccine, the CDC reported. Fully vaccinated people total 217,110,680, or 65.4%, of the U.S. population, according to the CDC.

The five commodity investments to buy for profiting from Putin’s predatory predilections should be able to rise amid the economic sanctions given to Russia in the wake of the nation’s attack of neighboring Ukraine. Those commodity investments offer investors ways to heighten their returns regardless of any Putin policy missteps.

Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, GuruFocus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The book is great as a gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Call 202-677-4457 for multiple-book pricing.

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