With gold trading down sharply from its highs, Keith-Fitzerald offers a special report on gold stocks in Money Morning, highlighting three companies that he consider to be the "very best of the best."
"Gold remains a key profit opportunity -- especially if inflation, or even stagflation, is taking hold. It should also help that economic uncertainty is escalating. However, since the economic outlook has grown more uncertain, we've decided to our recommended list down to just three picks:
"The StreetTracks Gold Trust (NYSE: GLD) is an ETF that tracks the price of gold directly, making it the simplest way to invest in the yellow metal via an ETF. And with a market cap approaching $17 billion, this fund has ample liquidity.
"Barrick Gold Corp. (NYSE: ABX) is a Toronto-based company with mostly North American production, as well as properties in South America and Africa, and some copper and zinc add-ons. It has a $38 billion market capitalization, so there's plenty of liquidity.
"It has a trailing P/E of 19.27 and a forward p/e of 15.11. By gold-mining standards, this company has a substantial presence, is reasonably valued, and has little political risk. The company also recently sent some very bullish signals to the market and reasserted its confidence in meeting its 2008 output target of up to 8.1 million ounces of gold.
"One other key point: As big backers of income-producing stocks, we liked Barrick's announcement that it was boosting its June dividend by 33%.
"Yamana Gold (NYSE: AUY) is another U.S.-listed/Canada-based company, but this one does its mining in Brazil, Argentina, Chile, Honduras and Nicaragua. It has a market cap of $9.7 billion and a trailing P/E of 39.17, but its forward P/E is only 13.91.
"Despite its geographic reach, it faces only a medium geopolitical risk. Expect the company to double production to 2.2 million ounces per year by 2012, primarily in Brazil and Argentina."
Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.
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Reader Comments (Page 1 of 1)
7-02-2008 @ 4:28PM
lordejeff said...
Both gld and slv are moving together towards highs. With the current economic conditions, I expect gld to continue on it's current path until the Fed starts making hawkish statements or raises the interest rates.
I think we'll know when to sell gld by watching for slv to be oversold. When this happens, gld will be done and its time to get out.
here's a pretty good article that discusses this in more detail: http://www.greenfaucet.com/hanlons-pub/wheres-gold-going-watch-silver
I think there's a lot of stress and hope around gold right now- hopefully this article helps you make a more informed decision of when to get out.