Although its risk and volatility is off-putting for many investors, I believe that it is worth considering adding a little exposure to the resources sector due to the diversification that it offers.
With that in mind, I've taken a look at three resources shares to see if there is an investment opportunity available. They are as follows:
Fortescue Metals Group Limited (ASX: FMG)
My first preference in the iron ore industry is rival BHP Billiton Limited (ASX: BHP) due to its diverse operations. However, with Fortescue aiming to increase the grade of its produce in FY 2018 and even look into mining lithium, I think this low-cost producer could be a good option for investors. Especially with its shares down 20% over the last three months.
Galaxy Resources Limited (ASX: GXY)
Although the lithium miners have gone gangbusters this year, a recent pull-back has potentially brought about a buying opportunity for patient investors. My pick in the industry is Galaxy due largely to its world-class assets and strong management team. Its Mt Cattlin site is operating strongly and I expect it to deliver high levels of free cash flow this year.
Worleyparsons Limited (ASX: WOR)
Investors have been fighting to get hold of this engineering company's shares this year due to signs that capital expenditures across the local mining services industry were rebounding. Unfortunately, though, I think this boat has now sailed and its shares are overvalued. In light of this, I would look elsewhere in the sector.
