THARISA (THS) 155.8p

Gain to date: 18%

Original entry point: Buy at 132p, 28 October 2021

Sanctions on Russia have led to a rally in metal prices on the assumption that supplies from this country will be disrupted.

South Africa-based chrome and platinum group metals producer Tharisa (THS) is a beneficiary of these sanctions as market prices are going up as global supplies could tighten if Russia’s output is no longer part of the global supply mix.However, one cannot rule out a slowdown in the global economy because of the war in Ukraine. This in turn would reduce demand for commodities.

Investors who are nervous about the near-term outlook may want to take any profits on Tharisa given the shares have just hit a new record high. However, we’re sticking with the trade in the view that commodities demand is not going to fall off a cliff.

Tharisa has all the hallmarks of a business you want to own in the current environment. It generates lots of cash, it pays generous dividends, it makes good returns on the money invested in the business and the shares are cheap.

We might see increased volatility in the share price but investing in a commodities producer should be beneficial in a world of rising inflation.

SHARES SAYS: Stick with the shares.

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