For most of us, long-term investing is the name of the game.
But it’s hard not to be swayed as sentiment waxes and wanes and price volatility of some stock investments mean we are sometimes tempted to take profit just to make ourselves feel like we’ve booked actual gains, not just paper ones.
These 3 commodities players are long term holds, in my opinion, and here’s why.
Rio Tinto Limited (ASX: RIO)
The recent spectacular mining boom, as we understand it, is certainly over, however it seems that another boom cycle is underway and the likes of Rio Tinto Limited and BHP Billiton Limited (ASX: BHP) are solid proof of that.
Minerals and metals explorer Rio Tinto has logged some impressive first quarter production results, with iron ore shipments growing by 5% on the previous corresponding period to 80.3 million tonnes.
Iron ore production for the 2018 first quarter is also up 8% to 83.1 million tonnes – it’s hard not to find value in a stock that is booking this type of value time and time again.
And Rio CEO Jean-Sebastian Jacques said the company’s world-class Pilbara assets continued to “demonstrate flexibility” with the production of bauxite and copper also on the up.
Rio has tightened up assets with a $5 billion divestment for the quarter as part of a focus on “disciplined allocation of cash” to deliver returns to shareholders.
Rio shares are up 1.1% at the time of writing to $81.47 with the stock trading about 12% above its 200-period moving average in an upward trend with no signs of downturn anytime soon.
Iluka Resources Limited (ASX: ILU)
Mineral sands miner Iluka Resources Limited is poised to take advantage of industrial disputes at Rio Tinto’s Richlands Bay Minerals in South Africa which could offer up supply opportunities for the stock.
Iluka has reported an 8% rise in zircon, rutile and synthetic rutile production for the first three months to March, leading to strong revenue growth for the quarter.
Revenue increased to $264.1 million – up 21%.
Shares in Iluka have been rising steadily in the last 12 months with the price at the time of writing at $11.86 – up 25% from its $8.87 price at this time last year and investors don’t look set to quit their rally anytime soon.
One to keep a hold of right now.
Alumina Limited (ASX: AWC)
Aluminium price surges off the back of US sanctions imposed on Russia – the world’s second-largest producer – have been lucrative for companies such as Alumina Limited.
Shares in Alumina have tracked upwards steadily in the past year, at $2.82 today from $1.80 at this time last year.
Alumina invests in bauxite mining, alumina refining and selected aluminium smelting operations through its 40% ownership of Alcoa World Alumina and Chemicals and there is no reason why this company should not continue to outperform given overall market conditions.
Aside from the US sanctions, Alumina is also buoyed by reports the global activated alumina market will cross the billion dollar mark by 2024, with Asia Pacific companies said to lead the pack through the upsurge.
Alumina reported an NPAT of $339.8 million for the FY17 – up from a loss of $30.2 million in the previous corresponding period.
If this stock is already in your portfolio, hold tight.
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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. 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.