Bottom for commodities?

Value

These stocks have very high potential for appreciation. However, they are risky. Nothing risk, nothing gain. Most have high debts (the average debt/equity is 133% in this group) and their survival depends on many factors such as the prices of the commodities. The following table concentrates on their values.

Stock	Price (7/4/13)	Forward Yield	Cash Flow	P/B	Debt/ Equity	P- Score
ACI	3.69	-35%	Worst	.3	184%	-4
ANR	5.33	-75%	Worst	.2	70%	-6
ARLP	71.06	10%	Average	3.6	109%	8
BTU	14.86	3%	Worst	.8	126%	-2
CHK	20.92	5%	Worst	1.1	106%	1
CLD	16.19	5%	Worst	1.0	83%	-2
CNX	27.12	10%	Worst	1.6	81%	-1
DVN	53.05	5%	Worst	1.1	82%	-2
JRCC	1.82	-80%	Worst	.3	255%	-5
NRP	20.48	10%	Average	3.4	172%	3
RIO	40.69	10%	Average	1.6	57%	0
SID	2.61	15%	Worst	5.6	329%	2
WLB	11.4	5%	Best			-1
WLT	10.79	-35%	Worst	.5	276%	-2
YZC	7.03	15%	Best	.5	90%	4

BTU has coal mines in Australia, which is closer to its primary customer, China. RIO has mines of different ores all over the world. ARLP and NRP are partnerships.

If you do not want to deal with extra effort in filing the tax returns, buy partnerships in a non-taxable account. I have not checked out the requirements for filing tax returns for ARLP and NRP.

GDX, an ETF for gold miners, is not included in the above table. It has a huge non-correlation between GLD, the ETF for gold, so I believe there is good value in gold miners. GDXJ (not included in this article) is a similar one for junior miners, which is too risky for me.

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·         I could not resist and bought two stocks from the above list. As of 8/9/13, the performances are quite good.

Stocks	Buy Date	Return	Annualized return
BTU	06/24/13	18%	140%
GDX	07/15/13	14%	150%
FCX	07/31/13	21%	850%
DBC	08/08/13	2%	Too early

FCX is too good a price to pass and the insiders bought many shares. Annualized returns usually have no meaning when the holding period is less than 30 days. The return of DBC, an ETF for commodities, is tracked today 8/12/13. 

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My e-book Debunk the Myths of Investing could save you a lot of money in investing. The above is one chapter out of 105 and some important chapters will not be included in the blog.
  http://ebtonypow.blogspot.com/2012/12/special-debunk-myths-of-buffett.html

Sample portfolio for the book.
  http://stockportfolios.blogspot.com/2013/03/welcome.html

(c) 2013 Tony Pow

Disclaimer. I'm not responsible for your actions in your investment. Treat this as educational information and past performance does not guarantee future performance.