Commodities look like an early winner for 2022 as traditional and risk-on assets have continued to sink since the start of the year. Companies looking to make astute mergers and improvements in the space are likely to benefit from this trend.
That’s true for companies in the base and precious metals areas. Base metals play well to themes of inflation, as do precious metals. Investors looking for a blend of both can likely see outstanding performance in the months ahead.
Barrick Gold (GOLD) looks like it could expand into its winning business here. While the yellow metal has held up well over the past few months, the company is looking to expand into copper as well. That’s a commodity that tends to move in line with the overall economy, which could help steady Barrick’s overall cash flows.
Currently, shares of Barrick are up about 15 percent over the past year, just beating out the S&P 500 index. With slightly growing revenues and earnings, an expansion form here could help shares surge even further.
Action to take: Investors may like shares here, as inflation expectations remain high, which should bode well for both gold and base metals. Investors can even get a dividend as well, with a starting yield of 1.7 percent from here.
Traders may like the June $25 calls. Last going for about $1.20, traders can likely grab high double-digit gains in the coming months before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.