2016 was the year of the resources company as the prices of many of Australia's big commodity exports (i.e. iron ore, gold & coal) shot through the roof, powering gigantic increases in forward earnings for many of our biggest and best resources companies.
Of course, the biggest gains were seen in smaller capitalised companies that sit near, or on the border of profitability at lower commodity prices.
Are Winners Still Grinners?
The beginnings of fortunes were made from 2016's gains, but so often we see that one year's winners are the next year's losers, so how have 2016's stars performed so far?
| Stock | 2016 Gain (%) | 2017 Performance (%) |
| Resolute Mining Limited
(ASX: RSG) |
420 | -6 |
| Galaxy Resources Limited (ASX: GXY) | 357 | -17 |
| Whitehaven Coal Ltd (ASX: WHC) | 273 | 1 |
| Fortescue Metals Group Limited (ASX: FMG) | 215 | -9 |
| Mineral Resources Limited (ASX: MIN) | 202 | -13 |
| South32 Ltd (ASX: S32) | 158 | -2 |
| Worleyparsons Limited (ASX: WOR) | 110 | 15 |
| BlueScope Steel Limited (ASX: BSL) | 109 | 30 |
| Average | 230 | 0 |
Compared to the S&P/ASX 200 (Index: ^AJXO) (ASX: XJO), which has increased a mere 2% so far in 2017, the top stocks of 2016 have returned on average precisely 0%. Despite the clear boost to performance from Bluescope and Worleyparsons.
Where to from here?
This year we've seen the iron ore price fall, the gold price and aluminium price rise moderately, and the oil, copper, lead and nickel prices move essentially sideways.
Consequently resources stocks have generally struggled, but quality companies such as a2 Milk Company Ltd (Australia) (ASX: A2M) and XERO FPO NZX (ASX: XRO) with sustainable advantages over peers have outperformed. This may be the time to latch onto mid-cap growth stories.
