Gold vs. Gold Stocks: Commodity Outpacing the Sector

The following are returns for gold and gold stocks over the past 12 month:

Gold +5.8%

Agnico-Eagle (AEM) -4.7%
Barrick (ABX) -4.1%
Couer D'Alene (CDE) -39.5%
Eldorado (EGO) +13.6%
Freeport McMoRan (FCX) +8.2%
Gold Fields (GFI) -24.9%
Goldcorp (GG) -26.4%
Golden Star (GSS) +43.8%
Harmony (HMY) +0.5%
Hecla (HL) +48.7%
Iamgold (IAG) -13.0%
Kinross (KGC) +12.5%
Meridian (MDG) -17.2%
Newmont (NEM) -23.9%
Rangold (GOLD) +4.6%
Yamana (AUY) +35.6%

Weighted Average, Market Cap -7.7%

Amex Gold Bugs Index (HUI) -5.1%
Philadelphia Gold & Silver Index (XAU) -8.5%

The price of the commodity has outpaced the sector by 13.5% over the past year.

Comments

[omooc:]

Excellent coverage. I wonder if you include dividends in gold stocks in computing their performance. GG and AUY, for example, pay dividends with regularity. omooc

2007 Apr 27 08:40 AM

[dwot:]

I wrote a piece on my blog titled "How I Discovered the Gold Bubble" in which I outlined many of the problems facing mature gold producers. Most of my analysis was from only looking at Goldcorp, which is compounded by the fact they were getting most of their profitability from copper and not gold, so that specific problem would not apply to a pure gold producer. But I think the rest of the problems facing Goldcorp are industry wide.

I just discovered Newmont has had all of its copper hedged at $1.54, which comes off later this year so although I still think mature gold producers are overvalued, Newmont should show better performance relative to peers in the second half of 2007. They have about 230 million pounds of copper production. To me that looks like about an extra 50c per share in pre-tax earnings for the second half of the year.

makingsenseofmyworld.b...

2007 Apr 27 09:11 AM

[Steven Johnson:]

If you are looking for a couple of break out stocks with great potential look at Unico Inc. (UCOI) and Silverado Gold Mines Inc.(SLGLF)look at thier websites these stocks hold alot of promise. James Rapholz has highly recommended these two stocks as have many more Gold Bugs. Even Congress is looking at Silverado and has Dumped a 26 Million Dollar Grant in Thier Lap. They have a New Liquid Coal Technology Company with lots of promise besides the Gold Mine.These stocks will do better than Gold itself because they are so undervalued.

2007 Apr 30 10:20 PM