Leaders and Laggards: Commodity Stocks

With four months complete, 2014 has been a mixed bag for commodity producing stocks. While broad equity markets are hovering at about breakeven for the year, many commodity intensive stocks have made big pushes in both directions.

Below is a look at some of the sectors that are both leading and lagging through the first four months of 2014:

Leaders:  Anything Related to Gold

Gold mining stocks have been one of the worst investments possible for the last several years, plunging on weakness in the precious metals market. Cash flows dried up and many predicted that a wave of bankruptcies could be inevitable if gold prices went much lower.

But in 2014, gold mining stocks have been one of the best places to put your money. Gold prices have stabilized–though they remain far below all-time highs–which has brought some of the luster back to mining stocks. Here’s a look at a few ETFs that have staged huge rallies in 2014:

  • Global X Pure Gold Miners ETF (GGGG): Up 24.7%
  • Global X Gold Explorers ETF (GLDX): Up 23.8%
  • Market Vectors Junior Gold Miners Fund (GDXJ): Up 18.3%

Laggards: Steel, Timber, and Emerging Markets

Other commodity sectors have not been nearly as fortunate, extending losses from last year. Here’s a look at some of the laggards among commodity stock sector ETFs:

  • Guggenheim Timber Index ETF (CUT: Down 3.5%). Timber prices have been relatively stable so far this year, but the performance of timber stocks has disappointed Wall Street. Ongoing concerns about the health of the housing market appear to be the culprit here; many homebuilding stocks are also well off their 2013 levels.
  • Market Vectors Steel ETF (SLX: -7.3%). Though steel prices have shown some signs of life in recent weeks, many steel stocks have dipped considerably on the year. China considers to drive prices, and ongoing concerns about weak demand in the Asian economy have weighed on the prices of steel stocks. U.S. Steel (X) has been one of the hardest hit; the stock is down 13% this year and now has a market cap of just $3.7 billion.
  • Emerging Markets Metals & Mining ETF (EMT: -31.2%). Few sectors have been hit harder than emerging markets mining firms, which have taken it on the chin amid ongoing worries about Chinese demand.

Disclosure: No positions at time of writing.

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