9 Defence, Energy and Commodities Stocks Investors Can Consider Amidst Stagflation Concerns

This article was contributed to us by Dr Clemen Chiang, Co-Founder and CEO of Spiking.

The current environment of rising inflation, recessionary possibility and geopolitical uncertainty with the Ukraine crisis has given some cause for concern about stagflation. Amidst these concerns, here are three sectors investors should keep on their radar for investing: defence, energy and commodities. I coined it DEC since this new strategy for investing will last until December 2022 after the U.S. mid-term election.

Using Spiking’s proprietary stock-trading insights platform, which tracks U.S. stock transactions, here are nine stocks in defence, energy and commodities that investors should consider:

Defence

#1 Raytheon Technologies (RTX)

Raytheon Technologies is one of the largest aerospace, intelligence services providers, and defence manufacturers in the world by revenue and market capitalisation. With defence becoming a bigger priority for many nations amidst the geopolitical uncertainty, many investors are eyeing Raytheon Technologies.

In Q4 2021, Capital Research Global Investors was the biggest buyer of Raytheon Technologies stocks, holding 59.6 million total shares valued at $5.1 billion, according to Spiking’s platform. Based on the latest publicly available data, in Q4 2021, the average price that Capital Research Global Investors paid for RTX stock was $85.66, a good price gauge for investors contemplating buying Raytheon Technologies.

#2 Northrop Grumman (NOC)

Another global aerospace, defence and security company to keep an eye on is Northrop Grumman. With an annual revenue of $30 billion, Northrop Grumman has delivered outperforming gains and strong dividend hikes in 2021.

In Q4 2021, Ameriprise Financial Inc was the biggest purchaser of NOC stocks, with 2.3 million total shares valued at $866.3 million, according to Spiking’s platform. In Q4, 2021, the average price that Ameriprise Financial paid for NOC stock was $376.96, a good price gauge for investors.

#3 Lockheed Martin (LMT) 

Lockheed Martin is an aerospace, arms, defence, information security, and technology corporation with worldwide interests. Lockheed Martin appeals to different stakeholders due to greater momentum in the defence sector. Further adoption of defence-related reinforcements as the Russian-Ukraine volatility continues is expected to drive up the stock price.

In Q4 2021, Capital World Investors held the most LMT stocks, with 13.5 million total shares valued at $4.7 billion, according to Spiking’s platform. In Q4 2021, the average price that Capital World Investors paid for LMT stock was $351.17, a good price gauge for investors.

Energy

#4 Exxon Mobil (XOM)

Exxon, one of the world’s largest oil and gas trading companies, reported revenue of $84.97 billion, up more than 82%, in its Q4 2021 earnings. Capital spending rose to $5.8 billion while cash flow from operations hit $48 million, the highest level since 2021. In April, the company is expected to reorganise into three business units and combine the chemicals and refining divisions into a single reporting segment to further reduce costs.

In Q4 2021, FMR LLC was the biggest holder of XOM stocks, with 104 million total shares valued at $6.4 billion, according to Spiking’s platform. During that period, FMR LLC paid an average of $61.12 for XOM, a good price gauge for investors.

#5 Occidental Petroleum (OXY)

While oil company Occidental Petroleum is benefitting from oil price surges, the company is also developing carbon capture technology. This could spell major developments in energy efficiency, allowing the world to decarbonise while still using fossil fuels. The company is expected to generate $225 million annualised for every $1-per-barrel increase in oil prices. In 2021, Occidental realised $66.14 per barrel of oil, and its oil and gas operations generated $4.1 billion in operating income. With oil prices now more than $40 higher, Occidental has the potential to generate $9 billion in incremental profits.

In Q4 2021, Mfn Partners Management was the biggest purchaser of OXY stocks, with 10.9 million total shares valued at $337.9 million, according to Spiking’s platform. In Q4 2021, Mfn Partners Management paid an average of $30.90 for OXY, a good benchmark for investors.

Between 4 to 16 March, Berkshire Hathaway bought three consecutive purchases of Occidental which are worth more than $8 billion of shares.

#6 Chevron Corporation (CVX)

Chevron, like other oil and natural gas companies, has benefitted from rising energy prices due to geopolitical tensions and concerns around oil and gas availability. Since Chevron’s top and bottom lines are heavily dependent on the price of these commodities, investors tend to bid up its shares when energy prices are rising. The company’s strong Q4 2021 earnings results show just how much it can benefit when oil prices are high, with CEO Mike Wirth describing last year as “one of our most successful years ever.”

In Q4 2021, Berkshire Hathaway held the most CVX stocks, with 38.2 million total shares valued at $4.2 billion, according to Spiking’s platform. During that same period, the average price that Berkshire Hathaway paid for CVX stock was $110.61, a good gauge for investors.

Commodities

#7 The Mosaic Company (MOS)

This Fortune 500 company is the world’s leading integrated producer of concentrated phosphate and potash — two of the three most important nutrients in agriculture. Since January 2022, MOS shares have shot up 72%, with solid growth prospects and attractive valuation. Mosaic’s shares are currently trading at a level that is lower than the industry average, suggesting that the stock still has upside potential.

In Q4 2021, Soroban Capital Partners LP held the most MOS stocks, with 4.4 million total shares valued at $168.9 million, according to Spiking’s platform. During that same period, Soroban Capital Partners paid an average of $38.42 for MOS stocks, a good gauge for investors.

#8 CF Industries (CF: NYSE)

CF Industries Holdings is one of the largest manufacturers and distributors of nitrogenous fertiliser and other nitrogen products globally. The company’s principal nitrogenous fertiliser products are ammonia, granular urea, urea ammonium nitrate solution and ammonium nitrate. CF Industries is expected to report cash flow expansion of 90.8% in 2022.

In Q4 2021, FMR LLC held the most CF stocks, with 15 million total shares valued at $971.6 million, according to Spiking’s platform. In Q4 2021, the average price that FMR LLC paid for CF stock was $64.63, a good benchmark for investors.

#9 Nutrien (NTR: NYSE)

Shares of Nutrien, a fertiliser-maker, have increased 38% since January 2021, benefiting from higher prices for commodities and healthy demand for crop nutrients. Since 2021, Nutrien shares have rallied 67.7% beating the fertiliser industry’s 48% increase. Nutrien has also outperformed the S&P 500’s 7.4% rise over the same period.

In Q4 2021, Black Creek Investment Management held the most NTR stocks, with 5.1 million total shares valued at $361 million, according to Spiking’s platform. During that same period, Black Creek Investment Management paid an average of $71.26 for NTR stock, a good gauge for investors.

Powerful stock insights to build generational wealth

These top nine stocks in the defence, energy and commodities spaces were identified using Spiking’s artificial intelligence and data-powered stock-trading insights platform. A user-friendly platform designed to elevate investors’ portfolios by providing access to date, volume of stock transactions and “universal net stock purchase”; a metric revealing the number of stocks that have been purchased and sold.

Using the trading data of top investment managers, Spiking repurposes it into proprietary insights that streamline’s decision-making process of investors. The platform highlights the exact price that top investment managers purchased the stock at, allowing investors insight to purchase the stock at a lower price. The platform also provides education around investing to help people build generational wealth. The Spiking community actively shares their knowledge and insights across different fields. Visit spiking.com to learn more and be part of the community.