In a country like ours it pays to be aware of the underlying commodity trends. This is more true today than at any other time as the world awakes from the coronavirus pandemic to a world fraught with tension. I have found that if you pay attention, and understand the way things are moving there is always a chance to profit. 

Gold miners

The gold price is the king of all commodity trends. It remains at an all time high in Australian dollars. Recent falls have been more influenced by the exchange rate with the US dollar than giant swings in the gold price. The easy analysis is to say gold is a hedge against uncertainty. An asset that rises when equities fall. However, there is more to it than that. 

Record low interest rates, even negative interest rates, around the world have combined with immense levels of quantitative easing. This means more available cash. Where there is a high demand, like investment assets, we see inflationary pressures. 

Within this space there are still S&P/ASX 200 (INDEXASX: XJO) shares selling at reasonable prices. The Regis Resources Limited (ASX: RRL) share price fell by 5.5% last week for no discernible reason. The company has maintained a 9-year compound annual growth rate for sales at 22%. An 8-year earnings per share CAGR at 17.2% and a share price CAGR at 22.9%.

Battery Metals

Rumours this week that Tesla Inc (NYSE: TSLA) had developed a million mile battery caused a lot of speculation.  Including a claim from General Motors Company (NYSE: GMC) that they too had almost completed a million mile battery. This means a renewed upward commodity trend for future facing metals such as nickel, silver, and copper in particular. Companies like BHP Group Ltd (ASX: BHP) and Sandfire Resources Ltd (ASX: SFR) are ASX 200 shares that may benefit from any rise in the copper price, with BHP also heavily involved in global nickel production.

South32 Ltd (ASX: S32) is a large scale player in the nickel industry. It is also a high volume producer of silver from the Cannington mine in Queensland. Both of these are used on battery manufacture as well as across the board in the renewables sector. 

Grain industry

The upward commodity trend in grain has continued despite the Chinese 80% tariffs. The share price of Australian producer Graincorp Ltd (ASX: GNC) has continued its upward momentum. GrainCorp is not very exposed to the tariffs imposed thus far.

Food security is quietly becoming a very important issue. Over the past three months we have seen the worst locust plagues for a generation across Africa, The Middle East and South Asia. Ukraine, the food bowl of Europe, is also expecting a markedly lower harvest in 20/21 after a record crop in 19/20. Moreover, the UN has raised the spectre of starvation at “biblical” levels.

More reading

• Should you invest $1,000 in Altium shares today?
• ASX 200 Weekly Wrap: ASX rallies on mining highs
• ASX 200 shares to buy for growth and income
• Where to invest $5,000 in ASX 200 shares immediately
• Is the NAB share price a buy today?

Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to start the week on a positive note. At the time of writing the benchmark index is up a sizeable 1.6% to 5,583.4 points.

Four shares that are climbing more than most today are listed below. Here’s why they are charging higher:

The Afterpay Ltd (ASX: APT) share price has jumped 6% higher to $47.24. This morning the payments company announced that Elana Rubin will become its permanent Chair with immediate effect. Rubin intends to retire from the ME Bank board following its June 2020 meeting, but will remain as a Non-Executive Director on the boards of Telstra Corporation Ltd (ASX: TLS) and Slater & Gordon Limited (ASX: SGH).

The Flight Centre Travel Group Ltd (ASX: FLT) share price has climbed 5.5% higher to $11.92. The prospect of New Zealand opening up its borders to Australian tourists could be behind this gain. It isn’t just Flight Centre on the rise. A number of travel shares have started the week in a very positive fashion.

The TPG Telecom Ltd (ASX: TPM) share price is up 3% to $8.04. The catalyst for this gain appears to have been a broker note out of Morgans this morning. According to the note, the broker has upgraded TPG Telecom’s shares to an add rating with an improved price target of $9.14. It sees a lot of positives in its merger with Vodafone Australia.

The Western Areas Ltd (ASX: WSA) share price has pushed 2.5% higher to $2.28. This morning the nickel producer announced that it has entered into a subscription agreement with Panoramic Resources Limited (ASX: PAN) to acquire up to 19.9% of its rival. Western Areas will pay cash of $28.6 million for the stake in the junior nickel producer. This investment provides Western Areas with exposure to the future restart of the promising Savannah Project.

More reading

• Should you invest $1,000 in Altium shares today?
• Why these ASX stocks will be under the spotlight on Monday
• Why Afterpay and cohorts could confirm the economy bottomed in April
• How these 3 ASX financial shares have proved their doubters wrong
• How to use ASX shares to become a millionaire

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why Afterpay, Flight Centre, TPG Telecom, & Western Areas are charging higher appeared first on Motley Fool Australia.

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