Join our community of smart investors

Cheap US resources companies

SIPP PORTFOLIO: David Stevenson is keen to buy into the US stock markets, but is still sitting tight
Cheap US resources companies

My self-invested personal pension (Sipp) plan has managed to avoid the worst of the market volatility helped by yet another big increase in the share price of property group Quintain Estates - inspired by shareholder activists - as well as another jump in the share price of engineering services group Hamworthy, where I sold out half my holding two months ago. I think shares in both Hamworthy and Kentz are looking overbought at the moment and I'd be very reluctant to recommend either as a buy at current price levels.

I am, by contrast, looking closely at industrial engineering giant Charter International, which sells into the resources sector - recent results spooked the City and prompted a 26 per cent price fall within the last month. Trading doesn't look amazing at the moment, yet I still believe that this is a quality world class play on the new emerging markets infrastructure space and I'd be very tempted to buy some shares as a contrarian play if the price falls below 550p - it also helps that Charter yields over 4.1 per cent in dividends.

I've also increased my research-based buy list with some new additions from the US stock market. American finance newspaper Barron's recently ran its twice yearly roundtable with some of the best investors in the world who were asked to pick out their favourite themes, ideas and stocks for the coming year. A number of key themes emerged. The first is that there are still some keenly priced companies that control strategically valuable resource plays - Eastern US coal play Alliance Resource Partners LP looks fascinating and reasonably priced, as does phosphate products specialist Innophos Holdings. I'm also thinking of buying into one of the world's lowest cost gold producers - Goldcorp. You don't have to be an enormous gold bug to believe that gold miners will mightily benefit from rising bullion prices.