Motley Fool Analyst Mike King wrote earlier today, "If you won shares in a resources stock, good luck, you might need it."
He couldn't be more right.
Since February 2013, commodity prices have crashed.
Copper is down 27%, oil is down 60%, iron ore is down 56% and thermal coal is down 44%. Besides gold and aluminium miners, none have been spared.
Three of Australian investors' favourites resources picks are Rio Tinto Limited (ASX: RIO), Northern Star Resources Ltd (ASX: NST) and Senex Energy Ltd (ASX: SXY).
Rio Tinto is a "diversified" miner which derives nearly 90% of its earnings from iron ore, a key steelmaking ingredient. Down 12% for the year, Rio has actually survived the latest price falls better than most. Unfortunately, despite a promise to materially increase shareholder returns in the near-term, investors would be wise to keep Rio on their watchlist, with many analysts forecasting significant falls in commodity spot prices still to come.
Over the past year Northern Star has performed exceptionally well for shareholders as the price of gold (in AUD terms) has risen to around $1,500 per ounce. Since recently deciding to undertake an aggressive drilling campaign, the company is now bringing a lot of positive results to the market. For example, today the company updated shareholders on its performance in the December quarter, which showed all-in sustaining costs of $1,073 per ounce and an average realised price of $1,417 per ounce. If you're bullish on the outlook for gold, now could be the time to take a second look at Northern Star.
Finally shares in Senex Energy, down 6% in 2015 so far, have been heading straight down over the past six months as the oil price continues to freefall. Whilst Senex continues to be a well-run business, now increasingly focused on gas assets, its outlook for the near-term looks volatile. Indeed with some analysts forecasting oil prices to hit just $US40 per barrel (currently $US46) in 2015, it could get worse before it gets better. However, over the long term the fundamentals for gas as a low-cost energy source, look good.
