Rethinking resource equities: the disconnect between prices and profits

摘要

A rising world population and emerging market growth are bullish for commodities for the medium- and long-term future, but unfortunately there is a disconnect between commodity prices and commodity stocks. High prices are a great well upstream, but the pipeline is siphoned-off at many points before it flows downstream to equity investors. Resource firms will differentiate themselves by how they solve all the problems that lie between prices and profits: do their management teams say "yes" to profitable projects, or just big projects? Can they negotiate favorable treatment when governments seek a share of the wealth? Commodity stocks need to be evaluated on their competitive advantages, just like any other industry. After all, commodity stocks, are still stocks.