Should you buy these resources shares?

After charging higher for much of the last 12 months, the resources sector has come under significant pressure in the last couple of weeks.

This has led to the S&P/ASX 200 Resources (Index: ^AXJR) (ASX: XJR) falling 6% since May 17.

Should you seize on this weakness to buy the shares of these three resources companies?

BHP Billiton Limited (ASX: BHP)

The shares of this mining giant have now dropped almost 7% from their 52-week high. While BHP Billiton isn’t the bargain buy it was 12 months ago, I do see a lot of value in its shares. However, recent events in Italy could throw a spanner into the works. There are concerns that Italy could be next in line to follow the UK out of the European Union. If this stifles global economic growth then it could put pressure on commodity prices and BHP Billiton’s profit growth. I’m optimistic that it will not come to this and that the mining giant would be a good investment, but it is still worth taking this possibility into account before investing.

Oil Search Limited (ASX: OSH)

It has certainly been a rollercoaster of a month for this energy producer. Its shares started the month at $7.91 before surging over 9% higher to $8.64 amid rising oil prices. But with oil prices now giving back a lot of their gains, Oil Search’s shares are almost back to where they started. Which I think makes them about fair value based on current oil prices. Because of this, I would suggest investors hold off an investment for the time being and wait to see if oil prices stabilise.

Western Areas Ltd (ASX: WSA)

One commodity that has continued to appreciate is nickel. According to Reuters, Shanghai Futures Exchange nickel climbed 2.8% to US$17,592 a tonne yesterday. This stretched its month to date gain to almost 8% and means the base metal reached a three-year high. Nickel prices have been rising as investors bet that demand for the metal will increase in line with China’s electric vehicle boom. I think Western Areas could be worth a closer look, especially after recent share price weakness.

But if you're not keen on resources shares then these potential market-beaters might be more to your liking.

Top 3 ASX Blue Chips To Buy In 2018

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor James Mickleboro 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.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!