These commodity-exposedstocks enjoyed double-digit leaps last week. So whats driving them and buy generic cialis online can it continue?
Copper bottom rally
Mining giant Rio Tinto (LSE: RIO) leapt 12% last week, itsshare price soaring in the wake of Donald Trumps shock electoral victory. It wasnt the only mining sector beneficiary. Big names such as Antofagasta, BHP Billiton and Glencore also flew on hopes that Trump would green light $1trn of US infrastructure, which fired up the biggest weekly copper rally in 35 years.
The news also helped to overshadow reportsthatRio Tinto had only just reported itself to the Serious Fraud Office over a $10.5m consultancy payment forthe Simandou project in Guinea, despite having been aware of the issue for more than two months.
Chinese arithmetic
The Trump bounce is the icing on the cake for Rio Tinto, which has seen its share price almost double from 1,577p to 3,069p since the lows of viagra online canadian pharmacy mid-January. I have to express continuing surprise at the success of the mining sector, given that global growth fears have yet to go away, nor have concerns that Chinas economy is floating on a massive credit bubble. If Trump fulfils cialis liquid another electoral promise and slaps a 45% on tariffon Chinese exports thats a big if everything couldsuddenly come to a head.
However, Rio Tinto has slashed its costs and although debt remains high at around viagra without a prescription $12.9bn in August, it has been falling, and the company was able to announce ina $3bn bond buyback plan in September, as it puts spare cash to use. Earnings per share (EPS) may have dropped 8% this year but areforecast to rise 11% in 2017, while the yield is forecast to rise to 3.2%. Trading at a forecast 16.9 times earnings Trumphad better deliver that infrastructure blitz, andChina had better stay afloat. 2016 was the year to invest in Rio Tinto. 2017 could prove tougher.
Here Weir go
Glasgow-based engineerWeir Group(LSE: WEIR)also has reason to celebratea Trumpvictory, with its share price up 10% over the past week. Again, its down to that hoped-for infrastructure blitz. Trump is in favour of fracking, which is good news for companies providing hydraulic fracturing products and services, such as Weir.
Weir group was hit hard by the falling oilprice as demand from shale drillers dried up, yet it has recovered sharply over the last six months, its share price rising52% in that time. Trumps victory came at the right time viagranoprescription-buy for the group, which published a disappointing set of Q3 interims on 1 November, warning of tough trading conditions but with signs of market improvements.
Glut punishment
Falling oil and gas activity knocked orderinputs by 7% year-on-year: after-market orders dippedonly 1% ginseng as viagra lower but worryingly,original equipment input fell20%. The hope is that the resilient shale industry will rebound but with oil now falling below $45 amidfresh talk of a glut, this is by no meanscertain.
Earnings per share may drop19% this year but areforecast to recover strongly in 2017 to rise 27%. I would struggle to recommend the stockon todaysforecast valuation of 26.7 times earnings. Given the risks, I would be looking for a cheaper entry point.
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Harvey Jones has no position in any shares mentioned. The Motley Fool UK has recommended Rio Tinto and Weir. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
