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Top Metal for Profits Right Now
By George Leong for Daily Gains Letter | Sep 12, 2014
A look at precious metals shows gold and silver are devoid of any momentum at this time, while copper has been steadily retrenching from its recent highs.
Copper is playing off of the global economic growth, but a metal that is surging on the charts and catching the imagination of metal traders on the London Metal Exchange is zinc.
Zinc is used in numerous industrial and consumer applications. Steel companies use zinc as a rust inhibitor, so it’s quite important to manufacturing. The United States Mint also uses zinc to make pennies.
The problem is that the world supply of zinc is contracting.
However, zinc is currently around a three-year high and looks good as an investment opportunity at this time.
An intriguing small-cap zinc play that has been sizzling on the chart and is an investment opportunity in the global economic renewal and supply issues is Horsehead Holding Corp. (NASDAQ/ZINC). The company’s share price is up 62% from its 52-week low and has easily outperformed the S&P 500 over the past year with a 45% advance. But despite the company’s advance, Horsehead seems to still have upside potential, which suggests the company could offer a good investment opportunity.
Operating via its Horsehead Corp. subsidiary, the company produces specialty zinc and zinc-based products that are made from recycled materials.
The company closed an old plant and replaced it with a newer, more advanced facility that will produce better fabricated steel products along with raw materials found in the manufacturing of rubber tires, alkaline batteries, paint, chemicals, pharmaceuticals, and stainless steel.
Products include zinc metal used as a protective coating to … Read More
The Sector That Will Bounce Back Once the Government Shutdown Is Over
By John Whitefoot for Daily Gains Letter | Oct 8, 2013
The U.S. government shutdown has turned some federal agencies into ghost towns, like NASA (with 97% of its workforce furloughed), the Department of Housing and Urban Development (96%), and the Department of Education (94%). Still, some agencies, like the Departments of Defense and Homeland Security—with just 18% and 14% of their staff on furlough, respectively—are considered more essential than others.
That said, those Department of Defense numbers may be a little misleading; military and contractor personnel were not affected by the U.S. government shutdown. Half of the Department of Defense’s civilian population of roughly 400,000 were furloughed without pay on October 1.
As a result, companies doing business with the Department of Defense will feel an immediate pinch to their bottom line. That’s in part because of civilian Department of Defense personnel performing audits and certifying military products and services—which they can’t do if they’re not working. An extended furlough also means government acquisition personnel cannot keep the military lifecycle going.
In light of the fact that roughly 10% of the manufacturing workforce in the U.S. is engaged in some form of defense production, the U.S. government shutdown could impact the U.S. economy on a larger scale than some imagine.
That said, the impact of the U.S. government shutdown on defense stocks will vary from company to company, depending on funding and other regulations. While smaller defense stocks tend to rely on government contracts for a larger percentage of their revenue than the biggest defense contractors, that doesn’t mean either will escape the U.S. government shutdown unscathed.
For example, The Boeing Company (NYSE/BA) warned that deliveries of some of its … Read More
