How to profit in volatile resources

Article Excerpt

The Resources and Commodities sector of the economy has gone through a once-in-a-generation price boom in the past few years. Investors generally expect booming demand from India and China to keep prices high. However, this sector has always been highly volatile and subject to sudden downdrafts. We feel the best way to cut your resource risk is to stick with high-quality companies such as these three. They all have a broad range of income streams, which helps them stay profitable, even if prices fall. Hidden or little appreciated assets should fuel their growth for decades. They also have the flexibility to adjust production in the face of lower prices, which conserves cash for dividends and stock repurchases. CHEVRON CORP. $70 (New York symbol CVX; Conservative Growth Portfolio, Resources sector; Shares outstanding: 2.2 billion; Market cap: $154.0 billion; WSSF Rating: Above average) is the second-largest integrated oil company in the United States, after ExxonMobil Corp. The company produces oil and natural gas in 35…

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