JPMorgan's gold miner picks


It's a good idea to have exposure to gold stocks in one's portfolio, say JPMorgan analyst John Bridges and team, but beware of sector plays (GDX -1.3%), and instead pick and choose carefully.

Goldcorp (G +0.1%) is a "simple decision stock," says the team, thanks to its strong balance sheet, growth profile, and disciplined management. Names like Barrick (ABX -1.2%), Newmont (NEM +1.1%), and Kinross (KGC -1.9%) would fare better in a gold bull market, but today's "back-to-basics phase" means valuations are driven by strong operations and accretive deals.

Another theme is to own players with operations in the safest locations, an idea paying off for Agnico (AEM +0.7%), but the team also recently initiated B2Gold (BTG +1.1%) with positive coverage on the idea some companies can learn how to operate successfully in "more complex locations."

Another favorite is laggard Buenaventura (BVN -0.5%) which is likely to see improved results in H2.

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Comments (6)
  • Doug Eberhardt
    , contributor
    Comments (4903) | Send Message
     
    Long JNUG on this pullback. Maybe one more move up.
    20 Jun 2014, 03:30 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (4903) | Send Message
     
    Nice end of day run for JNUG. Holding over weekend.
    20 Jun 2014, 04:10 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (4903) | Send Message
     
    Out of JNUG on that last run up. :-)
    23 Jun 2014, 11:26 AM Reply Like
  • King Rat
    , contributor
    Comments (1841) | Send Message
     
    Wonderful timing, JPM, wonderful timing.

     

    What is this nonsense of "accretive deals". Exactly how much M&A has been going on in the sector over the past year?

     

    "Don't buy the sector, just buy the winners. Oh yes, and a few laggards while you're at it."

     

    I am sure they perform grammar checks but they missed a few logic checks there.
    20 Jun 2014, 03:32 PM Reply Like
  • techy46
    , contributor
    Comments (12038) | Send Message
     
    Long ABX hedged with 2015 and 2016 covered LEAPS.
    20 Jun 2014, 03:55 PM Reply Like
  • james.
    , contributor
    Comments (1377) | Send Message
     
    "Cheat Sheet" by Christopher today at 4:01 pm EDT did change his NEM recommendation from "Hold" to "Buy" with a Price Objective of $31 per share. He currently has no position in NEM ; his Fundamental analysis is very detailed, and includes quotes from CEO Goldberg; read it today by going to http://on.mktw.net/qPAyXt , and enter NEM in the Search Field, and then left click on the article in the "News" section .
    The NEM P&F Chart Price Objective is $38 per share, obtained using widely available Software with my selection of a Box Size of 4.4% for best accuracy. Similarly, other P&F Price Objectives are as follows : HL = $5.91 , GLD = $169 , and SLV = $27 .
    Contrary to the erroneous claim in the above Seeking Alpha article that Gold isn't now in a Bull Market, Gold is in fact now rising up on its 3rd Leg Super Cycle that will classically carry it to new all-time highs of $2700 per oz circa July 2015, and Silver to $54 per oz.. The 2nd leg Gold Super Cycle classically concluded in Dec 2013 when it did Double-Bottom at $1186 per oz in Dec 2013; that $1186 is the Geometric mean between the high and low of that 2nd Super Cycle leg, which is a 50% correction on semilog paper. June 20, 2014 at 1:59 pm PDT.
    20 Jun 2014, 05:01 PM Reply Like
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