A stack reclaimer with a pile of iron ore at the Rio Tinto Parker Point ship loading terminal in the Pilbara region of West Australia. A bear market in commodities has already begun as industrial activity in emerging economies has slowed, while a supply overhang remains.Ho New/Reuters
On the back of their January top picks list that delivered a whopping 37.8 per cent return through June 25, Clarus Securities has published their top picks for the second half of the year.
"In January we identified the theme that investors would likely look to the mid and smaller cap names for exposure to growth and that appears to have played out extremely well, especially for the mid-cap names on our list," say the report's authors.
It played out extremely well indeed. Take away Amaya Gaming's eye-popping 195 per cent return, and the group still produced an impressive 22 per cent gain so far this year.
As for the remainder of 2014, Clarus analysts say that as we are now six years out from the financial crisis and the subsequent slowdown in investment in the resource sector, there are indications of growing interest in commodity markets.
"From natural gas to zinc, nickel, and copper, under-investment is beginning to bring supply into balance in commodity markets," say the report's authors. "At the same time, the correction in technology valuations has provided an opportunity to revisit some excellent growth stories at reasonable valuations. As usual, execution will be an important driver of returns."
Their top picks for the second half of 2014 are as follows:
Asanko Gold
BSM Technologies
Continental Gold
Lonestar West
Merus Labs
Pine Cliff Energy
Rio Alto Mining
Spartan Energy
Urthecast Corp.
Read the full research report here.