Fast Growing Gold And Silver Concern Is 50% Below Price Targets

Feb.29.12 | About: Allied Nevada (ANV)

Gold is off to strong start in 2012. Given the amount of liquidity the world's central banks are pumping into the global banking system, this is likely to continue. One stock I recently came across that is rapidly increasing production that could benefit greatly by this trend is Allied Nevada Gold (NYSEMKT:ANV).

Allied Nevada Gold - "Allied Nevada Gold Corp., together with its subsidiaries, engages in the evaluation, acquisition, exploration, and advancement of gold exploration and development projects in the state of Nevada. It principally operates the Hycroft Mine, an open pit heap leach gold and silver mine covering approximately 61,389 acres of mineral rights and is located to the west of Winnemucca, Nevada" (Business Description from Yahoo Finance).

6 Reasons to buy Allied Nevada at $35 a share:

  • EPS is exponentially increasing. The company should post 54 cents in earnings for FY2011 and analysts project earnings of $1.64 a share in FY2012 and $2.24 in FY2013.
  • The company just announced gold and silvers reserves went up 24% in FY2011.
  • The stock is 50% below analysts' price targets. The consensus price target for the 9 analysts that cover ANV is just under $57.
  • Projected revenue growth in parabolic. Analysts expect sales growth north of 150% in FY2012 and more than 40% in FY2013.
  • The company has a solid balance sheet with around $3 a share in net cash.
  • The company is still 25% off its highs and just crossed its 100 day moving average (See Chart)

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Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in ANV over the next 72 hours.