Long Term Trends: Part 3: Minerals, Metals, and Mining

With the Multi-Year Globalization Trend in place, minerals and metals are in high demand. Growing economies especially in the emerging markets need minerals and metals such as copper, driving up demand.

Gold is often used as a hedge against inflation.

Specialty metals are also in demand. For example, new generations of airplanes need lighter materials that specialty companies can provide.

Companies include:

1. Freeport McMoran (FCX), Gold and Copper Company
   
2. Rio Tinto (RTP), Copper, Aluminum, Gold and other materials and minerals.
   
3. US Steel Corp (X), Steel Company
   
4. Michel Steel (MTL), Russian Metal and Steel Company
   
5. Posco (PKX), Korean Steel Products
   
6. Norilsk (NILSY.PK), Russian Nickel Company
   
7. iShares Gold ETF (GLD)
   
8. iShares Silver ETF (SLV)
   
9. Precision Castparts (PCP), Specialty Metals
   
10. Allegheny Technologies (ATI), Specialty Metals
    
11. Peabody Energy (BTU), Coal Company
    
12. Joy Global (JOYG), Mining Equipment Company
    
13. Bucyrus (BUCY), Mining Equipment Company
    
14. Layne Christensen (LAYN), Mining Equipment Company
    

Water, Energy, and Minerals with Layne Christensen (LAYN)

Today, on Mad Money, Jim Cramer seems to have offered no opinion on Layne Christensen (LAYN). While it may initially sound like a retailer, Layne Christensen is really a good $1 Billion industrial company.

Layne Christensen (LAYN) provides drilling and construction services for:
1. Water and Wastewater Infrastructure (largest part of the business)
2. Mineral Exploration (2nd largest part of the business)
3. Energy
4. Other

All sectors are in bull market mode. Water and water infrastructure is a critical need in the US and around the world. Some people consider water to be the next Oil.

Mineral Exploration is also very important. Basic minerals are important to help global growth. The same situation occurs with energy.

Layne Christensen (LAYN) has a forward PE of 26, 5 year estimated growth of 31% for a very cheap 0.83 PEG ratio (under 1 is very cheap).

Stock is very strong, and has reached its 52 week high.

Recently, however, the company announced that it may be selling $172 Million worth of shares. Having more shares in the market dilutes the value of each share.

Maybe, after more research, you should consider Layne Christensen (LAYN) on a pullback or after all the extra shares are offered on the market.