Miners that produce vital resources stand to benefit from a wave of restocking. Here's how to play it.

At the end of 2008 everyone was certain that investments in resource stocks were dead money, but 2009 proved to be one of the sector's best years. The question now is whether the run will continue.

Inflows to commodities-related stocks remain robust, as the whole spectrum of the investment community--from individual investors to money managers and hedge funds--remain extremely bullish on the prospects for commodities.

Recently analysts have unleashed an avalanche of upgrades for companies in the mining sector, coinciding with higher price forecasts for a wide range of metals. The main reasons for this upsurge in optimism are strong economic growth in China and an anticipated restocking of materials in developed nations.

Expect a near-term pullback in resource stocks. I examine key developments in the iron ore industry and what the implications are for our portfolio holdings.

Although we still believe the longer-term case for commodities remains intact, buying at reasonable valuations and being prepared to take profits off the table at opportune times is a good way to play the sector this year.

As long as investors are consumed with worry about the state of the global economy, commodity-producer stocks will be hard-pressed to mount a sustained rally. But this is an excellent time to lock down the sector’s best names at prices not seen since early in the decade.