commodity

Gold is currently trading at around $1,183 U.S. an ounce. That’s up 4% from April 19, 2010, when it was trading at around $1,138 U.S. an ounce, but still short of gold’s all-time high of $1,214.80 U.S., which it reached in late 2009. Gold’s recent rise has partly been driven by investor fears about European sovereign debt — Greek debt in particular. These fears are prompting more investors to buy gold and gold investments, because they believe gold will provide them with additional security.

Further European debt problems would push gold up even further

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Chemtrade Logistics Income Fund, $12.64, symbol CHE.UN on Toronto (Units outstanding: 30.7 million; Market cap: $387.7 million), is one of North America’s largest suppliers of sulphuric acid, sulphur, liquid sulphur dioxide and sodium hydrosulphite. It also supplies sodium chlorate, phosphorous pentasulphide and zinc oxide. Aside from selling chemicals, Chemtrade processes spent acid. Chemtrade first sold units to the public for $10 each, and began trading on Toronto in July 2001. Chemtrade has three divisions: The Sulphur Products and Performance Chemicals division supplies about 59% of the fund’s revenue. Pulp Chemicals accounts for 10% of Chemtrade’s revenue, and the International division supplies the remaining 31%. This division removes and markets sulphur and sulphuric acid outside of North America....

Noranda Income Fund, $2.96, symbol NIF.UN on Toronto (Units outstanding: 37.5 million; Market cap: $111.0 million), was created in 2002 to buy the CEZ processing facility and some assets that belonged to Noranda Inc. Falconbridge bought Noranda in 2005. Switzerland-based Xstrata Plc then bought Falconbridge. Xstrata Canada holds a 25% interest in Noranda Income Fund. The fund first sold units to the public for $10 each, and began trading on Toronto in May 2002. The fund’s CEZ processing facility is located in Salaberry-de-Valleyfield, Quebec. It’s the second-largest zinc-processing facility in North America, and the largest in eastern North America, where the majority of its customers are located....

Higher commodity prices and an improving global economy have pushed up the prices of many junior mining stocks recently. And we think the best juniors have the potential to go even higher. (In a recent Stock Pickers Digest hotline, we updated our buy/sell/hold advice on a junior mine that’s risen more than 50% in the past six months, Baffinland Iron Mines. It’s got an iron-ore project with strong potential on remote Baffin Island. Read on for further details.) Despite the strong potential of top junior mining stocks, it’s important to remember that these stocks are among the riskiest you can buy. That’s why we think it’s a mistake to load your portfolio up with these highly volatile companies. Instead, make sure your investments are diversified by spreading your holdings out across the five main economic sectors (Manufacturing & Industry, Resources & Commodities, the Consumer sector, Finance and Utilities)....

These days, we see lots of ads for books, seminars and software that purport to show you how you can consistently make returns of 50% to 100% (or more) yearly in forex investments. Some even go so far as to say you can do it in a few minutes a day. Forex investments involve dealing in foreign currency futures and options. Futures and options on foreign-exchange investments (or anything else) offer a great deal of leverage. If you could get that leverage to consistently work for you, you could make the kinds of returns on your initial stake that promoters of forex investments claim. However, leverage works two ways: It magnifies your profits when the market moves in your favour, but it magnifies your losses just as effectively when the market moves against you. That’s because the amount you owe on your investment loan stays the same, so every dollar you lose comes out of your equity....

Resource stocks should move higher as the global economy continues to recover in the years ahead. But there will be inevitable declines along the way. So we think you should cut your risk in this volatile sector by investing mainly in stocks of profitable, well-established resource companies with high-quality reserves. Teck Resources is a good example. The company bought Fording Canadian Coal Trust in 2008, just before the recession and credit crisis. That forced it to sell shares and assets to raise cash for debt repayments. However, Fording’s coal mines in B.C. should last 20 years or more. And the company’s copper, zinc and other mines make it less reliant on a single commodity. Resource stocks like Teck also provide a hedge against inflation. That’s because they profit directly from rising commodity prices. However, resources is one of the most volatile economic sectors. That’s why conservative investors should limit their resource holdings to no more than 20% of their overall portfolios.

Artis REIT, $11.32, symbol AX.UN on Toronto (Units outstanding: 43.5 million; Market cap: $492.4 million), owns industrial, office and retail properties in western Canada. Artis’s industrial properties account for 39.0% of its leasable space, followed by office (32.7%) and retail (28.3%). Artis continues to grow by acquisition. It recently agreed to pay $115.3 million for a number of properties in western Canada, including four Alberta industrial properties priced at $85.2 million. Three of these are in Edmonton and one is in Calgary. The deal also includes $5.8 million for retail property in Fort McMurray, Alberta. The new properties will increase the company’s leasable space to 8.4 million square feet in 105 properties. Geographically, its leasable space breaks down as follows: Alberta (49.7%), Manitoba (31.6%), B.C. (11.0%) and Saskatchewan (7.7%)....

Sherritt International, $6.84, symbol S on Toronto (Shares outstanding: 294.1 million; Market cap: $2.0 billion), is a diversified natural-resource company that produces nickel, cobalt, thermal coal, oil and gas. It also licenses its own mining technologies to other metals companies, and manages 376 megawatts of power-generation capacity in Cuba. Toronto-based Sherritt is a major nickel producer, with operations in Cuba and Canada. It also has a development project on the island nation of Madagascar, off the east coast of Africa. The company also produces oil and gas in Cuba, Spain and Pakistan. The company is the largest producer of thermal coal in Canada. (Many power plants burn thermal coal to generate electricity.) Sherritt is also developing Canada’s first coal-gasification project, near Camrose, Alberta. This process converts coal into a gas that can be used in place of natural gas....

KRAFT FOODS INC., $28.92, New York symbol KFT, is close to completing its purchase of U.K.-based Cadbury plc (New York symbol CBY). Cadbury is a leading maker of confectioneries, including chocolate, candy and gum. Investors who hold over 90% of Cadbury’s shares have tendered their holdings to Kraft’s offer. In all, Kraft is paying $19.4 billion in cash and shares. It expects to complete this takeover within the next two months. Meanwhile, Kraft earned $3.0 billion in 2009. That’s up 63.9% from $1.8 billion in 2008. Earnings per share rose 67.8%, to $2.03 from $1.21, on fewer shares outstanding. However, the 2008 earnings were depressed by $1.0 billion of writedowns and costs related to Kraft’s three-year restructuring plan, which it recently completed. The plan included selling or discontinuing less-profitable brands, closing plants and cutting jobs....

8 tips for spotting the best Canadian gold stocks