Top resource ideas: Bet on Buenaventura (BVN)

This article is part of a 20 article special report on "Metals, miners and money".

"Although gold is probably due to retrace some, bullion still looks very strong," says Jack Adamo's Insiders Plus. Here, he looks at Compania de Minas Buenaventura (NYSE: BVN).

"Open interest in gold futures, which measures the current size of bets made by futures traders, is 34% lower than it was in May of 2006, which was the last time we touched a speculative price peak. That suggests that much of this crowd is still on the sidelines. When they come rushing back in, the stocks can move up very fast."

The advisor continues, "The cheapest by far of all our gold stocks is still Compania de Minas Buenaventura. Even being up 53% year-to-date, it's selling at 15-times this year's expected earnings, with year end only three months away. It's unlikely earnings will miss expectations this late in the year.

"Of course, expectations a year out are much less reliable, but if current analysts' estimates are close, the stock is a screaming bargain. With '08 estimates of $3.59 a share, the stock is selling at 11-times next year's earnings, and has an earnings growth rate of 37%. Price/earnings-to-growth ratios like that make me salivate.

"If you've not filled your gold positions, here's your chance. I don't expect another opportunity for at least four months. Gold is usually strong going into the holiday season, and sometimes all the way into January. Buy Buenaventura."