Seeking Alpha

BCA Research believes this year could see a breakout for top gold companies, as the influx...

BCA Research believes this year could see a breakout for top gold companies, as the influx of new CEOs suggests the industry may start performing better: "Such shakeups usually herald a major shift in corporate strategy, and gold equities could do well, even if gold prices go nowhere." Plus, if the market remains bullish, typically volatile mining stocks could gain attraction as risk appetite grows.
Comments (4)
  • Uncle Pie
    , contributor
    Comments (2694) | Send Message
     
    If you look at the gold mining equities and pretend for a minute you don't know what business they are in, just in terms of p/e and other metrics, they look pretty attractive.
    Don't forget to check out Newcrest, NCMGY, Australia's largest gold miner and the fourth or fifth largest miner in the world. Appears more expensive than the other large miners but they have some very large projects under development to which the market is giving some value even though the revenues haven't started yet. Newcrest is a top pick over at Morgan Stanley. It's often overlooked just because it's on the other side of the planet.
    8 Feb 2013, 03:06 PM Reply Like
  • TDWelander
    , contributor
    Comments (639) | Send Message
     
    Barrick ABX, with their 27 mines, supplies the only relatively stable gold stock; though they have their challenges. No other gold miner,
    or any miner for that matter, operates this many mines; making Barrick the only gold sector stock providing any level of stability.

     

    Traders have been beating up well on the ABX stock since after the last May stock holders meeting; thinking they could generate some short sales, which they likely have. Though not enough for all the trouble they appear to have generated.

     

    With the Barrick gold cost around $600 per ounce plus or minus $50 depending on who you talk to, with the gold market price at or above $1600 per ounce; a $1000 per ounce gross margin, or 167% is better than any stock anywhere almost any time.

     

    Even with a stable gold price, the upside looks bright. If the gold price continues to trend up as governments demand inflation to pay off their debts, which appears a near certainty, going the way of Apple or Google for ABX appears a real possibility.

     

    Numerous known traders have come up with sophisticated financial information trying to make ABX look bad based on their high debt load; and the Barrick debt load certainly is high; though nothing compared to most utility stocks.

     

    With the cheapest money or debt available in modern history,
    loading up on cheap debt is precisely what Barrick has done;
    and certainly appears very smart no matter how many traders
    and analysts bad mouth the debt and debt increase.

     

    It should be obvious I have a holding in ABX and certainly want to see it do well. Why I have placed all of these facts here.
    9 Feb 2013, 11:30 AM Reply Like
  • chuck lewis
    , contributor
    Comments (336) | Send Message
     
    Editor, The Lewis Letter http://bit.ly/W3uM5K
    This could apply to a new CEO at Neemont Mining who has seen his stock drop to new lows since he arrived, unfortunately caught in a downdraft for the metal. NEM sells for almost half its asset value and pays a respectable 3% dividend. Deserves better.
    10 Feb 2013, 01:22 PM Reply Like
  • TDWelander
    , contributor
    Comments (639) | Send Message
     
    All of the mining stocks are being manipulated by traders as much as possible lately. Meaning, driving down the price for short selling has been common place; and will most likely continue. Almost none of the mining stock current prices come close to their intrinsic valuations compared to any other stocks or any other sectors. In this kind of market, you need to have a pretty long time horizon; as traders are beating up on each other and anything they can get their hands on in the biggest way I have seen in my lifetime.

     

    Best advice if you are unable or unwilling to have a long time horizon is to stay out of the stock market and find investments where traders do not have a foot hold.

     

    One of my uncles buys exclusively local stocks on a local exchange; where he has personally gone out to the small business to verify the assets, the business plan, and come up with his own probability of success.

     

    He lives in a metro area, can easily travel as needed, and is retired which allows him the time and patience to invest in this manner.

     

    Other than bonds, the local stocks alternatives is a good way to avoid the endless wall street gamesmanship.

     

    Bonds, as anyone following bond markets knows, have negative
    return rates after inflation; with the negative return rates expected to only get worse. The one exception may be municipal bonds. Not having had any recent investment advice on them by someone knowledgeable I know well or done any recent
    homework myself, the pitfalls probably exceed local stocks.

     

    So not much has changed. Markets, stock markets in particular are very messy business. And there is no indication it will change.

     

    If you do not have the where with all to make a substantial study of any market or stock you have an interest in investing, you are probably fooling yourself you can make money in any stock or market unless you have a long time horizon and have a preplanned stock price to get out.

     

    Or never speculate, always have a plan, do not deviate from that plan, and always execute following that plan. For any small investor, even some large ones, this is the best chance of making a positive return in any stock or market.

     

    Or pigs and most farm animals eventually get slaughtered. Do not be one of them.
    11 Feb 2013, 10:55 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector

Next headline on your portfolio:

|