Penny Stock Research

Penny Stocks To Buy

In Commodities

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Hi, My name is Aaron and I‘m with Penny

Stock Research, today were reviewing our

recently published article…

Penny Stocks To Buy In Commodities

Investors are finally starting to realize

just how bad commodities have been for

the past year or so. Certainly anyone

investing in commodities has been aware

of this…

but now mainstream investors are

getting clued in to just how bad it’s been.

And it’s not just oil, just about every

commodity has taken a beating recently.

For instance, iPath Bloomberg

Commodity ETF (DJP) is down 18% year-

to-date and 29% from this time a year

ago. DJP is an equally weighted

commodity index ETF, so it’s a pretty

good indicator of what’s been going on

overall. Here’s the chart:

It’s obvious from the chart just how bad

it’s been over the last year. But, just to

give you a few more data points, check

these out: Crude oil is down 54% over

the last year. Heating oil is down 45%.

Coffee is down 41%.

Natural gas is down 36%. Sugar is down

29%. Copper is down 26%. Even gold,

the popular safe-haven investment, is

down 7% over the past year. So you can

see, commodities have basically taken a

bath across the board.

Does this mean you should avoid

commodity penny stocks as well?

Not necessarily.

So what are the right commodity penny

stocks to buy?

Commodity companies are well

represented in the ranks of penny stocks,

so there are plenty to choose from.

However, I think the key is to avoid highly

speculative companies, particular those

related to gold and oil.

Here’s the deal… You see, one of the

main reasons for the fall in commodities

is oversupply. It’s particularly true of oil

due to all the fracking-generated supply.

The world’s oil storage tanks are

basically overflowing.

As such, it’s going to be very difficult to

justify spending money on a speculative

oil investment when so few operations

are profitable as it is. This glut could

take years to sort out.

Regarding gold, with global central banks

no longer stocking up on the precious

metal, demand is nowhere what it used to

be. Here again is a situation that likely

won’t change anytime in the near future.

So then, which penny stocks to buy?

Commodities can’t stay in the dumps

forever, despite the oversupply situation.

But, as I explained above, some

commodities are likely going to have a

longer road to climb. Those are the ones

to avoid.

In the meantime, there’s always going to

be demand for things like corn and

cocoa. Plus, these commodities can

actually see immediate supply hits due to

inclement weather.

As such, I’d be looking at commodity

companies related to agricultural and

soft products as much as possible.

There are typically a fair amount of

agricultural-related penny stocks out

there.

There may be equipment or chemicals

businesses in the ag industry, to name a

few possibilities. These are the better

long-term commodity bets.

If you’re interested in mining companies,

I’d stick to base metals companies rather

than precious metal ones. There’s a built-

in demand for base metals, such as

copper, which provide enough intrinsic

value to metals to make downturns less

likely to be as severe. The key here is to

avoid the most speculative companies.

Try to stick with established companies

which are only down to

penny stock levels due to the commodity

selloff – and not due to the company

itself. Keep in mind, no asset class is

going to be down forever.

Eventually, commodities will rebound.

And, you’ll be in good shape if you own

the best in class commodity penny

stocks.

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