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For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.
"The momentum for large-cap gold producers looks very bullish and my top speculative idea for 2008 is Yamana Gold (NYSE: AUY)," says Eric Roseman, editor of Commodity Trend Alert.
"Based in Toronto, Canada, Yamana is a large-cap gold-mining company with probably the best exploration portfolio in all of Central and South America.
"Yamana Gold had been heavily battered due to its buyout of Meridian Gold and Northern Orion. With these acquisitions now completed, the overhang of merger uncertainty has been lifted and the stock has sharply rallied off its 52-week low.
"The big picture for Yamana is a great portfolio of first-rate mines in Central and South America, booming earnings, rising positive cash-flow and production costs of $339 per ounce.
"I also expect production costs to decline over the next few quarters as the full impact of all mining integration is completed. For a gold-bug, that's exactly what we want to see; a solid company that's emerging into a world-class developer, lowering its production costs as gold prices hit new highs. That means a higher stock price over time.
"The acquisitions of Meridian and Northern Orion provides Yamana seven producing mines, including two major expansions, five development stage projects and a target of 2.2 million ounces by 2012 on an organic basis or assuming no new acquisitions.
"Yamana Gold reported record revenue and mine-operating results in the third quarter, with total production of 131,366 ounces of gold, an increase of 48% over the last 12 months. Total production thus far in 2007 is 367,816 ounces. Third quarter earnings were $71.5 million dollars compared to $4.7 million dollars 12 months earlier -- pretty solid numbers.
"Over the next several months, if not sooner, we expect to see great companies such as Yamana do well as gold prices smash through their January 1980 highs over the next few months. Buy."
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Reader Comments (Page 1 of 1)
2-02-2008 @ 5:55PM
BrianOH said...
I have looked at Yamana. It has a massive market
cap and low PE. Even based on projected future
earnings it looks very high ($11.6b). Can
anyone enlighten me?
12-22-2007 @ 8:45AM
John said...
Why is AUY still underperforming the gold sector? Since you made the rec it has dropped sharply, while most other gold stocks has remained stable or risen. Any dieas when we can expect AUY to get back to parity with the HUI index ? Thanks