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:
- 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 (AU).
- The six analysts that cover the stock have a median price target of $6 a share on the stock.
- 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.
- 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.