New York-based Tocqueville Asset Management LP, with over $8.8 billion in 13-F assets per its latest Q4 filing last Tuesday, runs their flagship Tocquville Gold Fund that has $2.3 billion in assets. The Tocqueville Gold Fund has been profiled in Barron's, Kiplinger, Money Magazine and other financial publications many times, and it is ranked in the top 11th percentile in its category by Morningstar, returning 23.0% compounded over the last ten years.
Based on a review of the latest Q4 SEC 13-F filing, we determined that Tocqueville is bullish on the following stocks that are also trading at a discount compared to their peers (see Table):
Newmont Mining Corp. (NYSE:NEM): NEM produces gold in the U.S., Australia, Peru, Indonesia, Canada, New Zealand, Ghana and Mexico. At $196 million, including the $8 million added in Q4, this is Tocqueville's largest position in its portfolio. NEM trades at a discount 11 forward P/E and 2.2 P/B compared to averages of 13.2 and 4.1 for its peers in the gold mining group, while earnings are projected to increase from $3.79 in 2010 to $5.46 in 2012, at an annualized growth rate of 20.0%.
Barrick Gold Corporation (NYSE:ABX): ABX is a Canadian company engaged in production of gold and copper in Peru, Canada, U.S., Australia, Chile, and five other countries. Tocqueville added $3 million in Q4 to its $77 million prior quarter position in the company. ABX is undervalued, trading at a discount 8-9 forward P/E and 2.2 P/B compared to average of 13.2 and 4.1 for its peers in the gold mining group, while earnings are projected to increase from $3.33 in 2010 to $5.65 in 2012, at an annualized growth rate of 30.3%.
Agnico Eagle Mines Ltd. (NYSE:AEM): AEM is a Canadian company engaged in the production, development and exploration of gold in Canada, U.S., Finland and Mexico. Tocqueville added $4 million in Q4 to its $43 million prior quarter position. AEM trades at 12-13 forward P/E and 1.7 P/B compared to averages of 13.2 and 4.1 for its peers in the gold mining group, while earnings are projected to increase from $1.76 in 2010 to $2.97 in 2012, at an annualized growth rate of 29.9%.
The following are some additional gold mining companies that Tocqueville is bullish about, but that are trading at a premium to the average valuation for the group (see Table):
Yamana Gold Inc. (NYSE:AUY): AUY is a Canadian company engaged in the exploration and development of gold properties in South America and Mexico. Tocqueville added $88 million in Q4, their second largest buy in the gold group, to their $2 million prior quarter position. The stock trades at a 14 forward P/E and 1.8 P/B compared to averages of 13.2 and 4.1 for its peers in the gold mining group, while earnings are projected to rise strongly from 59c in 2010 to $1.21 in 2012 at an annualized rate of 43.2%.
Silver Wheaton Corp. (NYSE:SLW): SLW is a Canadian buyer of purchase agreements for silver and gold from mining companies operating in Mexico, Sweden and Peru. Tocqueville held a large $113 million position in SLW at the end of Q4, including the $1 million added during the quarter. SLW trades at a 16 forward P/E and 5.0 P/B compared to averages of 13.2 and 4.1 for its peers in the gold mining group, while earnings are projected to rise up strongly from 42c in 2010 to $2.20 in 2012 at an annualized growth rate of 128.9%.
Goldcorp Inc. (NYSE:GG): GG is a Canadian company engaged in mining and exploration of silver, copper and gold throughout North and South America. At $159 million, including the $119 million added during Q4, this is the second largest position in Tocqueville's portfolio, and it is its single largest buy in Q4. GG trades at a premium 17-18 forward P/E and 1.9 P/B compared to averages of 13.2 and 4.1 for its peers in the gold mining group, while earnings are projected to increase from $1.38 in 2010 to $2.69 in 2012, at an annualized growth rate of 39.6%.
In addition (see Table), Tocqueville is also bullish on gold miners Eldorado Gold Corp. (NYSE:EGO), in which it added $15 million in Q4 to its $26 million prior quarter position; International Tower Hill Mines (NYSEMKT:THM), in which it added $15 million in Q4 to its $57 million prior quarter position; Gold Resource Corp. (NYSEMKT:GORO), in which it added $4 million in Q4 to its $112 million prior quarter position; and Ivanhoe Mines Ltd. (IVN), in which it added $4 million in Q4 to its $104 million prior quarter position. Also, Tocqueville is bearish on gold miner Randgold Resources Adr (NASDAQ:GOLD), in which it cut $14 million in Q4 from its $141 million prior quarter position.
Note to Table: The companies selected to be included in both the Top Buys and Sells and Top Holdings categories in the Table were picked on both an absolute basis, i.e. the highest dollar amounts of buys and/or sells, as well as those amounts relative to their market-cap. That way, the list is not biased towards the largest companies in the group.
Credit: Historical fundamentals including operating metrics and stock ownership information were derived using SEC filings data, I-Metrix® by Edgar Online®, Zacks Investment Research, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Disclaimer: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our 'opinions' and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.