3 Top Commodity Stocks to Consider Buying Now

Commodity is a broad term that can encompass everything from corn to gold. In general, commodities and the companies that produce them are prone to dramatic, and often swift, price swings -- so you need to dig a little deeper into stocks you are considering in the broad commodity sector. Here's why you should look at Franco-Nevada Corp. (NYSE: FNV), Teck Resources (NYSE: TECK), and, for more aggressive investors, Cameco Corp. (NYSE: CCJ).

Commodities are largely interchangeable. One ounce of gold is, basically, the same as every other ounce of gold. Thus commodity producers generally lack pricing power, leaving them largely subject to the prices dictated by supply and demand. This is good when prices are moving higher, but horrible when prices are falling. Contracts and hedging can help reduce the impact of volatile commodity prices, but can't eliminate the problem.

You need to look beyond just commodity prices when you buy a commodity stock, or you could end up selling at the worst possible time. Image source: Getty Images.

Source: Fool.com