Gold has managed to post a much better run than gold mining stocks over the past five years. Over time, this should correct. One stock that is selling significantly under analysts' price targets with solid valuations and good growth prospects is Gold Fields Limited (GFI).
"Gold Fields Limited engages in the acquisition, exploration, development, and production of gold properties. It also explores for copper. The company holds interests in mines located in South Africa, Ghana, Australia, and Peru. It has total attributable gold equivalent mineral reserves of 76.7 million ounces and mineral resources of 225.4 million ounces." (Business Description from Yahoo Finance).
7 Reasons to buy Gold Fields at just over $15 a share:
- Earnings are projected to grow rapidly. The company should make 72 cents in earnings for FY2011 and analysts project earnings of $1.58 a share in FY2012 and $2.14 in FY2013.
- The median analysts' price target on GFI is just over $22 a share.
- Production and revenue growth are growing significantly. Analysts project around 20% growth in sales for both FY2012 and FY2013.
- The stock has a dirt cheap five-year projected PEG (.39) and sells for less than 4 times operating cash flow.
- The stock is selling near the bottom of its five-year valuation range based on P/E, P/S and P/CF.
- The stock looks like it has good support in the $14 to $15 range and looks poised to cross over its 200-day moving average
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- The company is replacing reserves above production.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in GFI over the next 72 hours.