Bill Cara


Introducing the Cara- Natural Resource Company List

Welcome to Cara-NR, where natural resource investing meets strategic analysis.  Whether you’re a seasoned investor or just starting, dive into our carefully curated list, free from biases, and embark on your strategic natural resource investment journey.  There’s always more to learn, explore, and gain in the dynamic world of Cara-NR. Let the journey unfold!

Cara-NR: Your Guide to Strategic Natural Resource Investing

Investing in a natural resource company shares core principles with any other company investment—finding quality and allocating funds for income or capital appreciation. However, the distinct nature of natural resources introduces challenges due to fluctuating monetary asset prices.

Understanding Natural Resources

Natural resources encompass chemicals, construction materials, containers & packaging, paper & forest products, mineral resources, and fossil fuels. All play a pivotal role in the management and growth of the global economy. Mineral  resources are divided into metallic (e.g., Gold, Silver, Copper) and non-metallic (e.g., Uranium, Helium, Diamonds). Fossil fuels—Coal, Oil, and Natural Gas—are hydrocarbon-containing materials formed from deceased plants and animals, serving as crucial energy sources.

The Cara-NR List: A Unique Investment Approach

To assist investors in selecting high-quality natural resource companies, we’ve collaborated with experts from the Cara Community who specialize in
this field. The Cara-NR list is crafted free from sell-side investment analysts’biases, ensuring an unbiased perspective.

The list of Cara-NR Companies as of December 6, 2023.

This is the chart view.

The mix of companies.

There are 65 companies in the Cara-NR. Of these, there are 34 in the Basic Material sector (12 are also in the Cara 100) and 31 in the Energy sector (13 are also in the Cara 100). The largest cap Cara-NR list companies are often industry leaders in corporate fundamentals—balance sheet strength, free cash flow, and earnings—along with considerations of in-situ resource value. The latter factors and the ability to raise CapEx financing are most important to the pre-production developers whose investment case depends on discounted values of future cash flows and earnings, often when such calculations are guestimates.

This nuanced approach, where categories based on increasing geological confidence are defined as inferred, indicated, and measured, acknowledges the unique challenges of natural resource investments.

A Dynamic List for a Dynamic Market

The Cara-NR list is a dynamic work in progress, adapting to evolving conditions in the ever-changing business and economic landscape. It recognizes the importance of timing in trades—there are opportune moments to buy and sell, requiring agreement between buyers and sellers.

Evaluating Companies with Cara-NR

To evaluate the financial health and operational strength of established natural resource producers, consider the following criteria:

  • Revenue Growth: Check the year-over-year revenue growth to see if it’s increasing.
  • Profitability: Examine metrics like net income and profit margins to determine if the company is profitable.
  • Debt Levels: Assess the debt-to-equity ratio to ensure the company has a manageable level of debt.
  • Cash Flow: Analyze cash flow statements to see if the company generates positive cash flow.
  • Valuation: Consider financial valuation metrics like price-to-earnings (P/E) ratio, price-to-sales (P/S) ratio, and price-to-book (P/B) ratio.

Your comments on the blog are always welcome and appreciated. Cara-NR is more than just a list—it’s a community of investors committed to understanding and leveraging the power of investing in high-quality companies. Let the journey unfold!