In this article, we discuss the 5 best commodity stocks to buy now. If you want to read about some more commodity stocks to now, go directly to 11 Best Commodity Stocks To Buy Now.
5. Cleveland-Cliffs Inc. (NYSE:CLF)
Number of Hedge Fund Holders: 37
Cleveland-Cliffs Inc. (NYSE:CLF) operates as a flat-rolled steel producer in North America. On October 25, Cleveland-Cliffs posted earnings for the third quarter of 2022, reporting earnings per share of $0.29, missing market estimates by $0.17. The revenue over the period was $5.65 billion, down 5.8% compared to the revenue over the same period last year and missing market estimates by $140 million.
On October 26, B. Riley analyst Lucas Pipes maintained a Buy rating on Cleveland-Cliffs Inc. (NYSE: CLF) stock and lowered the price target to $26 from $32, noting that the company continues to battle higher input costs in 2022, weighed against a declining steel price environment.
At the end of the third quarter of 2022, 37 hedge funds in the database of Insider Monkey held stakes worth $475.3 million in Cleveland-Cliffs Inc. (NYSE:CLF), compared to 29 in the preceding quarter worth $451 million.
4. Archer-Daniels-Midland Company (NYSE:ADM)
Number of Hedge Fund Holders: 37
Archer-Daniels-Midland Company (NYSE:ADM) procures, transports, stores, processes, and merchandises agricultural commodities, products, and ingredients in the United States, Switzerland, Cayman Islands, Brazil, Mexico, the United Kingdom, and internationally. On November 28, reports indicated that Nestle, Associated British Foods, Mondelez and Archer-Daniels-Midland Company ranked £20 billion in profits in the space of a year after raising average food prices. Four of the multinationals have signaled that consumers should expect further price rises, except for Archer Daniels.
On October 26, Baird analyst Ben Kallo maintained an Outperform rating on Archer-Daniels-Midland Company (NYSE: ADM) stock and raised the price target to $98 from $94, noting that the company’s management continues to add value to shareholders through share repurchases and strategic M&A, setting up a strong long-term outlook.
Among the hedge funds being tracked by Insider Monkey, Glen Allen-based investment firm Markel Gayner Asset Management is a leading shareholder in Archer-Daniels-Midland Company (NYSE:ADM) with 1.5 million shares worth more than $117.7 million.
In its Q1 2022 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and Archer-Daniels-Midland Company (NYSE:ADM) was one of them. Here is what the fund said:
“Archer-Daniels-Midland Company (NYSE:ADM) is a leading agricultural processor that also operates a global nutrition business focused on the development of ingredients and flavors for food and beverages, supplements and more. The company’s recent operating results have benefited (unfortunately) from the war in Ukraine as grain prices and agricultural markets globally experienced strong price increases. ADM is positioned well to benefit from the volatility due to its stable North American agricultural base.”
3. Bunge Limited (NYSE:BG)
Number of Hedge Fund Holders: 48
Bunge Limited (NYSE:BG) operates as an agribusiness and food company worldwide. On November 22, Bunge unveiled that it has signed a strategic partnership with France’s BZ Group. Bunge has acquired 49% of the business and the Beuzelin family remains the majority shareholder of BZ group with 51% shares.
On October 24, BofA maintained a Buy rating on Bunge Limited (NYSE: BG) stock and lowered the price target to $130 from $138, noting that the agricultural cycle outlook remains quite strong amid the very tight crop supply/demand balance in the US and internationally.
At the end of the third quarter of 2022, 48 hedge funds in the database of Insider Monkey held stakes worth $763 million in Bunge Limited (NYSE:BG), compared to 48 in the previous quarter worth $729 million.
In its Q1 2022 investor letter, Old West Investment Management, an asset management firm, highlighted a few stocks and Bunge Limited (NYSE:BG) was one of them. Here is what the fund said:
“Bunge (pronounced BUN-GEE) Ltd (NYSE:BG) is one of the biggest agribusinesses and food companies in the world. Four worldwide companies dominate the sector, the others being Archer-Daniels-Midland Cargill and Dreyfuss. One of our favorite ways to screen for new ideas is following insider buying. When I saw Form 4 filed by new Bunge CEO Greg Heckman, his purchase of $9 million of BG stock intrigued me. My initial thought was the company gave him the stock as a signing bonus. I contacted BG Investor Relations and asked whether it was a signing bonus or did Heckman write a check for $9 million. IR assured me it was his own hard-earned money that he invested in the company he was about to run.
Heckman was a long-time executive at Conagra Foods who sensed an opportunity at BG. One of his first moves as CEO was to move the company’s HQ from New York to St. Louis, right in the middle of America’s breadbasket. BG had been plagued for years with poor decisions by underperforming management. Heckman’s decision to move to St. Louis was indicative of a no-nonsense style and he would commence cutting expenses and selling non-core assets…read more
2. Albemarle Corporation (NYSE:ALB)
Number of Hedge Fund Holders: 49
Albemarle Corporation (NYSE:ALB) develops, manufactures, and markets engineered specialty chemicals worldwide. On November 20, Albemarle said that it has planned to spend up to $540 million to expand and modernize its bromine facilities in Magnolia, Arkansas. This project will run through 2027. The company’s third-quarter sales of bromine products were up 28% from the year-earlier period.
On November 8, RBC Capital analyst Arun Viswanathan maintained an Outperform rating on Albemarle Corporation (NYSE:ALB) stock and raised the price target to $380 from $371, noting that the advisory remains favorable on the firm due to a tight lithium supply-demand, although there was caution on the potential for large price swings in the lithium spot market.
At the end of the third quarter of 2022, 49 hedge funds in the database of Insider Monkey held stakes worth $621.5 million in Albemarle Corporation (NYSE:ALB), compared to 39 in the preceding quarter worth $600.6 million.
In its Q3 2022 investor letter, Carillon Tower Advisers, an asset management firm, highlighted a few stocks and Albemarle Corporation (NYSE:ALB) was one of them. Here is what the fund said:
“Albemarle Corporation (NYSE:ALB) is a global specialty chemicals company with leading positions in lithium, bromine, and refining catalysts. The company’s shares outperformed meaningfully in the quarter, driven largely by robust demand for lithium used to manufacture electric vehicle batteries. Albemarle is well-positioned for the accelerating adoption of electric vehicles and could benefit from the Inflation Reduction Act.”
1. Devon Energy Corporation (NYSE:DVN)
Number of Hedge Fund Holders: 51
Devon Energy Corporation (NYSE:DVN) is an independent energy company that primarily engages in the exploration, development, and production of oil, natural gas, and natural gas liquids. On September 5, Devon Energy declared that it has entered into a liquefied natural gas export partnership with LNG export infrastructure development company, Delfin Midstream. The partnership includes an executed Heads of Agreement for long-term liquefaction capacity.
On November 22, Citi analyst Scott Gruber maintained a Buy rating on Devon Energy Corporation (NYSE: DVN) stock and lowered the price target to $78 from $80, noting that the company posted encouraging third-quarter results.
At the end of the third quarter of 2022, 51 hedge funds in the database of Insider Monkey held stakes worth $1.5 billion in Devon Energy Corporation (NYSE:DVN), compared to 57 in the previous quarter worth $1.5 billion.
In its Q2 2022 investor letter, GoodHeaven Capital Management, an asset management firm, highlighted a few stocks and Devon Energy Corporation (NYSE:DVN) was one of them. Here is what the fund said:
“Our biggest dollar gainer within this period was Devon Energy Corporation (NYSE:DVN), a position which emanated from a takeover in early 2021 of our long-time holding WPX Energy. We are sitting on a material (unrealized) gain from our cost and are now receiving material dividends thanks to Devon’s thoughtful fixed/variable dividend policy. Energy is now a hot sector for investors but we have had material exposure for a long time. We remember a bit too well $40 oil, NEGATIVELY PRICED front-month oil contract, and what it’s like to own a company with leverage and negative free cash flow during such periods. Our desire to have our biggest portfolio exposures be high-return, growing, reasonably predictable and moderately levered companies lead us to reduce our Devon exposure in the past. When the recent facts and circumstances for the industry changed and appeared supportive of healthy oil prices, we decided to maintain a sizable holding and more recently added to the position. At Devon’s Q1 dividend rate, which is most variable in nature, the shares now yield approximately 10% and our yield on our average cost is materially higher. In addition, we maintain additional energy exposure through our long-term (and successful) holding in Hess Midstream and less directly through TerraVest and Berkshire Hathaway’s energy investments.”
You can also take a peek at 10 Best Stocks in Each Sector and 10 Best Regional Bank Stocks To Invest In.
