We’ve been talking about commodities for a while now. When an asset class is trading at dirt-cheap valuations, it makes sense to dig in and find any hidden opportunities within.
There’s huge potential for a massive boom in infrastructure and construction spending. And that, in turn, will send certain commodity stocks higher.
With the impending $3 trillion federal infrastructure spending bill, construction and materials needed in those national projects will be in high demand. That’s $3 trillion in addition to everything already spent on infrastructure in the past year.
That’s a lot of construction.
With a general building boom, commodities and building material will see a massive influx of revenue.
For these reasons, I’m wildly bullish on iron ore right now. Iron ore is the primary component of steel, a material required in most construction projects.
You can’t build any significant project without a lot of steel. You even need it to make cement. Steel is ubiquitous in infrastructure projects, and without it, you have no infrastructure.
About Labrador Iron Ore Royalty Corporation
This week, my stock selection is Labrador Iron Ore Royalty Corporation (OTC: LIFZF). Labrador owns mining rights that it then leases to other companies.
As a bonus, Labrador even yields high dividends when the price of iron ore is high. And higher demand means higher prices.
LIFZF rates a 99 overall on Adam O’Dell’s Green Zone Ratings System, which means we are “Strong Bullish” on the stock.
Here’s a breakdown of LIFZF’s highest-scoring metrics:
Momentum — LIFZF is a high-momentum stock with a score of 96. Its price has blasted higher throughout the past few years. After the COVID-19 pandemic crash a year ago, the stock shot back up, proving resilient.
Volatility — LIFZF scores a 94 on volatility, which means it is relatively less volatile than most stocks on the market. LIFZF is a stable play because it’s a middle man. It has a solid position in the market.
Growth — Labrador rates a 90 on growth. LIFZF depends on the demand for iron ore, which will be high in the coming year.
Bottom line: Labrador is an aggressive play. If you’re not bullish on iron ore, I wouldn’t buy the stock. But I am. I believe infrastructure spending will see a boom this year, and Labrador will profit immensely.
To safe profits,
Charles Sizemore is the editor of Green Zone Fortunes and specializes in income and retirement topics. Charles is a regular on The Bull & The Bear podcast. He is also a frequent guest on CNBC, Bloomberg and Fox Business.
P.S. Check out The Bull & The Bear podcast every week for more picks from Adam, Charles and me. You can listen on Apple Podcasts, Spotify, Amazon and Google Podcasts. You can also catch episodes on our YouTube channel here.