Just like in 2016, so far in 2017 it has been another year of outperformance for the resources sector.
As of Friday's close the S&P/ASX 200 Resources (Index: ^AXJR) (ASX: XJR) had put on a gain of over 15%, compared to a 6.3% gain from the benchmark S&P/ASX 200 index.
I believe this return demonstrates why having some exposure to the resources sector can give your portfolio a real boost.
With that in mind, I thought I would take a quick look at two resources shares to see if they are worth considering as an investment today. They are as follows:
BHP Billiton Limited (ASX: BHP)
Although BHP is a diversified miner, approximately two-thirds of its EBITDA is generated from its petroleum and iron ore businesses. So when I make an investment in this mining giant I need to be positive on the outlook for iron ore and oil prices. Pleasingly, iron ore has recently rebounded and has shown signs that it could have bottomed, and oil prices have improved greatly due to strengthening demand and OPEC's production cuts. This could make BHP a good option for investors.
Kidman Resources Ltd (ASX: KDR)
It certainly has been an incredible year for lithium miners and Kidman in particular. In the last six months the lithium miner has seen its share price rocket over 330% thanks to bullish forecasts for lithium carbonate prices and the signing of definitive agreements with Sociedad Quimica y Minera de Chile regarding the 50-50 Mt Holland joint venture. The two parties will develop a world-class lithium refinery that will allow for production of both lithium hydroxide and lithium carbonate. While I think Kidman has enormous potential, I think a lot of future growth and high lithium prices are already priced in. In light of this, I would only invest if there were a sizeable pull-back in its share price.
