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"One of the best inflationary hedges of the 20th century is often forgotten -- timber," suggests Larry Spears.
The contributing editor to Money Morning explains, "In the modern era, inflation has never been a match for timber. On average, the price of harvested lumber itself has risen more than 5% annually over the past 100 years.
"Since 1910, the value of timberland as an investment has risen faster - and with less volatility - than stocks as measured by the Standard & Poor's 500 Index. Here's a trio of stocks to benefit from this trend.
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FeedTimber: The 'Forgotten Inflation Hedge'
Chasing Value: Anglo American, Gold or Something Else
In recent discussions with some friends, one had bought Anglo American ADR (AAUKY) when I recommended it years ago, and the other thinking about what the current opportunity might be. It seemed time for an update.I'm into Anglo for $9.80 a share and a spot check has it trading at $23.00 per share in morning trading; a nice 135% return. It was much easier to recommend the stock before. Now that AAUKY is hovering around it's 52-week high of $23.55, it's a tough call. It certainly is not a value play now.
Continue reading Chasing Value: Anglo American, Gold or Something Else
Yamana (AUY): An inflation hedge, and more
Here's a defensive/growth hybrid that, I am underscoring, is only for those investors who can tolerate at least moderate risk: it's not for the low-risk investor.
Historically, mining stocks in general and gold stocks in specific are not defensive plays. But Yamana Gold Inc. (NYSE: AUY) breaks the mold. Yamana operates mines in Central and South America with 7 million ounces of proven and provable reserves. In general, analysts project solid gold production gains for Yamana, with the company adding copper to its mining plans, moving forward. The Reuters F2007/F2008 EPS consensus estimate for AUY are 75 cents to $1.00.
Still, as one realizes, production is not the only factor in a mining company's success. The price of precious metals is just as important, and the argument here is that demand for gold will remain strong: driven by jewelry and industrial uses. And, of course, there's gold's use as an inflation hedge. (Gold traded Monday at $792.60 per ounce, up $5.10.) The aforementioned, combined with Yamana's cost containment, make a better-than-adequate case for AUY's shares.
[Note: Technical analysis agnostics stop reading here; all others continue.]
Technically, Yamana's chart is adequate. The stock has recovered from a summer sell-off and is above its 50-day and 200-day moving averages.
Stock Analysis: Yamana is a moderate-risk stock not suitable for low-risk investors. Consider buying AUY's shares if you can tolerate moderate risk, but do not make AUY your primary defensive stock investment. Sell / Stop Loss if you were to buy it: $8.50.
Historically, mining stocks in general and gold stocks in specific are not defensive plays. But Yamana Gold Inc. (NYSE: AUY) breaks the mold. Yamana operates mines in Central and South America with 7 million ounces of proven and provable reserves. In general, analysts project solid gold production gains for Yamana, with the company adding copper to its mining plans, moving forward. The Reuters F2007/F2008 EPS consensus estimate for AUY are 75 cents to $1.00.
Still, as one realizes, production is not the only factor in a mining company's success. The price of precious metals is just as important, and the argument here is that demand for gold will remain strong: driven by jewelry and industrial uses. And, of course, there's gold's use as an inflation hedge. (Gold traded Monday at $792.60 per ounce, up $5.10.) The aforementioned, combined with Yamana's cost containment, make a better-than-adequate case for AUY's shares.
[Note: Technical analysis agnostics stop reading here; all others continue.]
Technically, Yamana's chart is adequate. The stock has recovered from a summer sell-off and is above its 50-day and 200-day moving averages.
Stock Analysis: Yamana is a moderate-risk stock not suitable for low-risk investors. Consider buying AUY's shares if you can tolerate moderate risk, but do not make AUY your primary defensive stock investment. Sell / Stop Loss if you were to buy it: $8.50.
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