Buy the Dip in These 2 Cheap Commodity Stocks

imageStock Markets20 minutes ago (May 27, 2021 04:31PM ET)

(C) Reuters. Buy the Dip in These 2 Cheap Commodity Stocks

As the global economy reopens and huge fiscal and monetary stimuli spur infrastructure building and job creation, a broad-based recovery in commodity prices is occurring. Furthermore, since commodities can provide a hedge against inflation, growing inflationary pressure has investors flocking to commodity stocks. As such, we think the recent price dip in commodity players POSCO (NYSE:PKX) and Impala Platinum Holdings (OTC:IMPUY) should be seen as an opportunity to invest in them because they are capable of generating higher returns in the coming months. Let’s discuss.As the U.S.’ recovery from its COVID-19-pandemic-led recession gains momentum, ultra-loose monetary policy and several rounds of fiscal stimulus have been creating inflationary pressures. In response to this, investors are betting on commodities as a hedging strategy.

Since raw materials are the building blocks of many economic activities, the demand for commodities is rising from several industries. Furthermore, a supply-demand imbalance is driving the prices of several commodities higher.

Since the environment for investing in commodities looks promising, we think one should consider buying the dip in stocks such as POSCO (PKX) and Impala Platinum Holdings Limited (IMPUY). These companies have dominant commodity businesses and therefore are well positioned to deliver solid returns in the near to midterm.

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Buy the Dip in These 2 Cheap Commodity Stocks

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