The market correction is creating a solid buying opportunity for long term investors. It's a good time to start picking up cheap shares and setting up your portfolio for some big gains for 2012. After soaring to new highs, gold has stumbled in recent months and that has caused an even sharper drop in many gold and silver mining stocks. Some of the stocks below became incredibly cheap recently and have started to rebound. However, there is plenty of money to be made if you buy on dips and hold for the longer term.
If you buy at or near the recent lows, you could end up just about doubling your money if these stocks hit the price targets set by analysts this year. Most analysts set price targets based on where they believe the stock should be trading at in the next 12 months or so. Here are the gold and mining sector stocks that have price targets which are around double the current price:
Coeur d'Alene Mines Corporation (NYSE:CDE) is trading at $27.25. CDE is a silver and precious metals company based in Idaho. The RSI for CDE is about 64, so these shares are a bit overbought now. These shares have a 52 week range of $19.30 and $37.59. The 50-day moving average is $25.19 and the 200-day moving average is $27.25. Earnings estimates for CDE are for a profit $2 per share in 2011, and profits of $3.86 per share in 2012. This stock was trading around $21 just a few days ago and has rebounded sharply. Because of this, I would wait for dips below $25, before buying in stages. Deutsche Bank has a buy rating and a $50 price target for CDE shares.
Stillwater Mining Co. (NYSE:SWC) shares are trading at $11.93. Stillwater is a leading producer of palladium and platinum. These shares have traded in a range between $7.31 to $25.90 in the past 52 weeks. The 50-day moving average is $11.04 and the 200-day moving average is $17.88. SWC is estimated to earn about $1.50 per share in 2011 and $1.58 in 2012. Stillwater recently agreed to buy another company in order to diversify into copper and gold. The recent plunge in precious metals prices slammed this stock, but it has been rebounding lately. Because of that, I would wait for dips below $11 to buy. Barclays Capital has set a $20 price target for SWC shares.
Silvercorp Metals, Inc., (NYSE:SVM) is trading at $9.32. SVM is a silver and precious metals company based in Canada. These shares have a 52 week range of $5.86 and $16.32. The 50-day moving average is $8.17 and the 200-day moving average is $10.58. Earnings estimates for SVM are for a profit of 60 cents per share in 2011, and profits of 76 cents per share in 2012. BMO Capital Markets has an outperform rating and a $15 price target for SVM shares.
Pan American Silver Corp., (NASDAQ:PAAS) is trading at $29.79. PAAS is a silver and precious metals company based in Canada. These shares have a 52 week range of $24.16 and $43.06. The 50-day moving average is $29.69 and the 200-day moving average is $32.71. Earnings estimates for PAAS are for a profit of $2.84 per share in 2011, and profits of $3.35 per share in 2012. These shares make sense to buy around $28 or less. Dahlman Rose has a buy rating and a $46.99 price target on PAAS shares.
Vale S.A. (NYSE:VALE) is trading around $26.12. Vale is a leading mining company, and is based in Brazil. The 50-day moving average is $24.99 and the 200-day moving average is $29.77. These shares have traded in a range between $21.14 to $37.25 in the last 52 weeks. Earnings estimates for VALE are about $4.89 per share in 2011 and $4.47 for 2012. VALE pays a dividend of 57 cents per share which is equivalent to a yield of 1.8%. This stock was trading around $30 in August and has since dropped to current levels. This stock could remain weak for awhile, so it only makes sense to average in and buy on dips. Dahlman Rose set a price target of $43 per share and earlier this year Deutsche Bank set a $48 target.
The data is sourced from Yahoo Finance. The information and data is believed to be accurate, but no guarantees or representations are made. Rougemont is not a registered investment advisor and does not provide specific investment advice. The information contained herein is for informational purposes only.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.