Swiss investment bank UBS disclosed Friday its top 10 commodity stock picks, all of which fall into one of four categories, thermal coal, iron ore, gold and merger and acquisition opportunities.
Thermal coal has been undaunted by the global sell-down, and supported by Indian and Chinese buying; iron ore's price has been protected by politically-constrained Indian export flows; and gold still promises to preserve value, UBS said in a report.
Here are the bank's top 10 recommendations, grouped by industry sector.
Consol Energy Inc. is the lowest-cost eastern U.S. thermal coal producer and, because of its ownership of an East Coast port, well-positioned to profit from emerging global demand.
Straits Asia will outperform the sector in the medium term, with selling price and production growth momentum continuing into 2013. Look for volumes to grow 15 percent per year over the next three years.
Glencore International Plc has great market intelligence, is financially well-positioned, able to respond to acquisition opportunities and owns a strong position in thermal coal.
Rio Tinto Plc is the best capitalized of the diversified miners and its share buyback is adding value.
Cliffs Natural Resources Inc., a major iron ore and metallurgical coal company, has been expanding its exposure to seaborne markets and is well-positioned for production growth and higher free cash flows.
Fortescue Metals Group Ltd. is the largest and most liquid iron ore play in the world and has been able to lift its production capacity substantially in recent years.
Goldcorp Inc. enjoys low-cost production with relatively little political risk, good exploitation potential and (has) the highest three-year production growth among the North American senior producers.
European Goldfields Ltd. is attractive to large gold mining companies due to its Greek development permits, huge reserve base and strong financing from Qatar Holdings.
First Quantum Minerals Ltd. offers Tier-1 copper assets in Zambia and a proven management team.
Umicore SA is unmatched in its ability to recover/refine more than 20 metals from many feedstocks and should experience average earnings growth of 10.5 percent through 2015.