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11 Best Commodity Stocks To Buy Now

In this article, we discuss the 11 best commodity stocks to buy now. If you want to read about some more commodity stocks to buy now, go directly to 5 Best Commodity Stocks To Buy Now.

Commodities are often split into broad categories like hard and soft commodities. Natural resources are included in hard commodities such as gold, rubber, and oil, whereas soft commodities are agricultural products or livestock — such as corn, wheat, coffee, sugar, soybeans, and pork. Over the past few months, supply chain issues and the Russian invasion of Ukraine have resulted in an increase in commodity prices. A recent World Bank report underlines that there has been a significant increase in agricultural commodity prices. 

According to the report, this had led to intensifying food insecurity and extreme poverty in many developing economies. Inflationary pressures are also complicating the situation. The shrinking value of currencies of developing economies is driving up food and fuel prices, further deepening the food and energy crises in these areas. Due to currency depreciations, almost 60% of oil-importing emerging-market and developing economies saw an increase in domestic-currency oil prices during February 2022, per the bank. 

The World Bank report also claims that nearly 90% of economies observed a larger increase in wheat prices in local-currency terms compared to the rise in US dollars. A report shared by IMF in October 2022 says that commodity prices rose 19.1% between February and August 2022. Energy natural gas has increased up to 129.2%, as Russia cut gas supplies to Europe. Base metal prices declined by 19.3%, and precious metal prices fell by 6.0%, while those of agricultural commodities fell by 5.4%. 

Pablo Saavedra, the World Bank’s Vice President for Equitable Growth, Finance, and Institutions, says that despite the fact that many commodity prices have retreated from their peaks, they are still high compared to their average level over the past five years. Ayhan Kose, Director of the World Bank’s Prospects Group and EFI Chief Economist, says that the combination of elevated commodity prices and persistent currency depreciation directly relates to higher inflation in many countries. 

He also added that in developing economies policymakers are unable to manage the most pronounced global inflation cycle in decades. They need to calibrate monetary and fiscal policies and get ready for a period of even higher volatility in global financial and commodity markets, the expert noted. Some of the top stocks to keep in mind considering these macro conditions include Chevron Corporation (NYSE:CVX), Gilead Sciences, Inc. (NASDAQ:GILD), and Philip Morris International Inc. (NYSE:PM). 

Our Methodology

The companies that operate in the commodities sector were selected for the list. Special importance was assigned to outlining the basic business fundamentals and analyst ratings for each firm to provide readers with some context so they can make more informed investment choices. Data from around 900 elite hedge funds tracked by Insider Monkey in the third quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.

Photo by Francisco Fernandes on Unsplash

Best Commodity Stocks To Buy Now

11. Cheniere Energy, Inc. (NYSE:LNG)

Number of Hedge Fund Holders: 70 

Cheniere Energy, Inc. (NYSE:LNG) is an energy infrastructure company that primarily engages in liquefied natural gas (LNG) related businesses in the United States. On November 15, Cheniere Energy posted earnings for the third quarter of 2022, reporting losses per share of $9.54. The revenue over the period was $8.85 billion, up 176.6% compared to the revenue over the same period last year and beating market estimates by $890 million.

On October 12, analyst Marc Solecitto maintained an Overweight rating on Cheniere Energy, Inc. (NYSE:LNG) stock and raised the price target to $200 from $186, noting that sequential improvements in international netbacks in the third quarter would drive upside to consensus third quarter and fiscal 2022 EBITDA estimates.

Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Steadfast Capital Management is a leading shareholder in Cheniere Energy, Inc. (NYSE:LNG) with 2.3 million shares worth more than $379.8 million. 

At the end of the third quarter of 2022, 70 hedge funds in the database of Insider Monkey held stakes worth $2.2 billion in Cheniere Energy, Inc. (NYSE:LNG), compared to 65 in the preceding quarter worth $3.3 billion. 

Just like Chevron Corporation (NYSE:CVX), Gilead Sciences, Inc. (NASDAQ:GILD), and Philip Morris International Inc. (NYSE:PM), Cheniere Energy, Inc. (NYSE:LNG) is one of the stocks feeling the heat of an economic slowdown. 

In its Q2 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Cheniere Energy, Inc. (NYSE:LNG) was one of them. Here is what the fund said:

“Also in the U.S., Cheniere Energy, Inc. (NYSE:LNG) performed well. Cheniere is an energy infrastructure company that owns and operates U.S. liquefied natural gas export facilities along the U.S. Gulf Coast. Shares benefited from the continued tightness in global LNG markets as a result of Russia/Ukraine tensions as well as a well-received capital allocation announcement and Cheniere’s revising guidance above expectations.”

10. Kenon Holdings Ltd. (NYSE:KEN)

Number of Hedge Fund Holders: 4

Kenon Holdings Ltd. (NYSE:KEN) operates as an owner, developer, and operator of power generation facilities in Israel, the United States, and internationally. On June 21, Kenon Holdings announced that its Board of Directors has approved a capital reduction distribution in an aggregate amount of approximately $552 million, or $10.25 per share. 

Among the hedge funds being tracked by Insider Monkey, Washington-based firm Arrowstreet Capital is a leading shareholder in Kenon Holdings Ltd. (NYSE:KEN) with 142,896 shares worth more than $4.9 million.

At the end of the third quarter of 2022, 4 hedge funds in the database of Insider Monkey held stakes worth $8 million in Kenon Holdings Ltd. (NYSE:KEN), compared to 3 in the preceding quarter worth $6.5 million.  

9. Intrepid Potash, Inc. (NYSE:IPI)

Number of Hedge Fund Holders: 8  

Intrepid Potash, Inc. (NYSE:IPI) engages in the extraction and production of potash in the United States and internationally. On November 2, Intrepid Potash posted earnings for the third quarter of 2022, reporting earnings per share of $0.97. The revenue over the period was $74.8 million, up 26.5% compared to the revenue over the same period last year.  

At the end of the third quarter of 2022, 8 hedge funds in the database of Insider Monkey held stakes worth $26.5 million in Intrepid Potash, Inc. (NYSE:IPI), compared to 10 in the preceding quarter worth $34.8 million. 

Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Two Sigma Advisors is a leading shareholder in Intrepid Potash, Inc. (NYSE:IPI) with 224,410 shares worth more than $8.8 million. 

8. Denison Mines Corp. (NYSE:DNN)

Number of Hedge Fund Holders: 12  

Denison Mines Corp. (NYSE:DNN) engages in the acquisition, exploration, development, extraction, processing, selling off, and investing of uranium properties in Canada. The shares have benefited from the German extension to the life of three nuclear power plants in the past few months, as well as from the increase in demand for uranium as supply chain issues force countries around the world to turn towards uranium instead of coal and oil to solve their energy issues. 

Among the hedge funds being tracked by Insider Monkey, London-based investment firm Sprott Asset Management is a leading shareholder in Denison Mines Corp. (NYSE:DNN) with 3.3 million shares worth more than $3.8 million. 

At the end of the third quarter of 2022, 12 hedge funds in the database of Insider Monkey held stakes worth $18 million in Denison Mines Corp. (NYSE:DNN), the same as in the preceding quarter worth $21 million.  

7. Wheaton Precious Metals Corp. (NYSE:WPM)

Number of Hedge Fund Holders: 25 

Wheaton Precious Metals Corp. (NYSE:WPM) is a metal streaming company that primarily sells precious metals in Canada and internationally. On November 14, Wheaton Precious Metals inclusively financed the updated resource estimate of Aris Mining. Wheaton made upfront $53 million and will make another $122 million during construction to purchase metals at a reduced price.

On October 19, analyst Ingrid Rico maintained a Buy rating on Wheaton Precious Metals Corp. (NYSE: WPM) stock and lowered the price target to C$64 from C$66.50.

At the end of the third quarter of 2022, 25 hedge funds in the database of Insider Monkey held stakes worth $564.4 million in Wheaton Precious Metals Corp. (NYSE:WPM), compared to 27 in the previous quarter worth $360.9 million.

Among the hedge funds being tracked by Insider Monkey, New York-based investment firm First Eagle Investment Management is a leading shareholder in Wheaton Precious Metals Corp. (NYSE:WPM) with 19 million shares worth more than $627 million. 

6. United States Steel Corporation (NYSE:X)

Number of Hedge Fund Holders: 29    

United States Steel Corporation (NYSE:X) produces and sells flat-rolled and tubular steel products primarily in North America and Europe. On November 8, United States Steel revealed that it reached a tentative deal with the United Steelworkers on a new four-year contract covering 11 thousand employees. This deal includes a 5% base wage increase annually for four years, equal to 21.55% compounded and a $4 thousand essential worker appreciation bonus. 

Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Soroban Capital Partners is a leading shareholder in United States Steel Corporation (NYSE:X) with 11 million shares worth more than $199 million.  

At the end of the third quarter of 2022, 29 hedge funds in the database of Insider Monkey held stakes worth $724 million in United States Steel Corporation (NYSE:X), compared to 30 in the previous quarter worth $617 million.

Along with Chevron Corporation (NYSE:CVX), Gilead Sciences, Inc. (NASDAQ:GILD), and Philip Morris International Inc. (NYSE:PM), United States Steel Corporation (NYSE:X) is one of the stocks feeling the heat of an economic slowdown. 

Click to continue reading and see 5 Best Commodity Stocks To Buy Now.

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Disclosure. None. 11 Best Commodity Stocks To Buy Now is originally published on Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

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Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

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