A Small North American Gold Stock To Ride Out The Post Election Sell-Off

| About: Hecla Mining (HL)

One of the few sectors that is rising today in what is looking like a post-election selloff is the gold & silver miners. One cheap stock in the sector that has picked up some positive catalysts recently is Aurizon Mines (AZK).

Key recent positives for AZK:

  • The election should provide a tailwind to gold prices as investors worry about continued gridlock, the coming fiscal cliff and the non-checked easy money policies of the Federal Reserve.
  • Dundee upgraded the stock to "Buy" from "Neutral" in late October.
  • Consensus earnings estimates for FY2013 have moved up nicely over the last month.

Aurizon Mines produces gold from its properties in North America.

4 additional reasons AZK is a good speculative play at $4.70 a share:

  1. The company's properties are in geopolitical stable North American regions so immune to some of the labor unrest that has plagued the majors like AngloGold Ashanti (NYSE:AU).
  2. The six analysts that cover the stock have a median price target of $6 a share on the stock.
  3. After falling about 4% in FY2012, sales growth is poised to grow in the high single digits in FY2013. I think the market will start to price this in by end of this year.
  4. The company has a robust balance sheet with over $200mm in net cash on its books. This represents over 25% of the Aurizon's current market capitalization. Subtracting this cash leaves AZK selling at around 9x forward earnings.

Disclosure: I am long AU, AZK. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.