NEW YORK ( TheStreet) -- It's been a great year for commodity stocks, as everything from silver and copper to wheat and cotton hit fresh highs in 2010.
Commodity stocks offer a high-risk, high-return way to play the boom in commodities as financial and operational leverage of companies can magnify returns in a bull phase and exacerbate declines in a bust.
M&A activity has also been driving the valuations of smaller companies. China and other emerging markets are consuming commodities at an unprecedented scale. As supplies tighten, larger companies are scouting for mid-cap companies that will help them quickly scale up production, which could otherwise take years to come on stream.
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