Stocks to Play the Recovery in Gold

Three Emerging Growth Gems in Gold

Three Emerging Growth Gems in Gold

Three Emerging Growth Gems in Gold

Gold has been traditionally known as the bedrock investment for investors who want to play it safe. Interestingly, recent changes in the global economy have challenged this status quo and gold is no longer the stable commodity we knew it to be.  Just this week, it was reported that gold fell $5.80 in April futures to level out at $1572.80 for a Troy Ounce at the COMEX division of the New York Mercantile Exchange. This is the lowest settlement price for gold since July 18, 2012. It may also interest you to know that gold went down 2.3 percent this week, which is some 12.5 percent down from its $1,796.50 high of October 4, 2012.

However, gold may be on its way to a rebound because of decisions made by the central banks Russia and Kazakhstan last month to increase their bullion reserves. In addition, Azerbaijan purchased bullion for the first time in three years in a bid to diversify the assets of her central bank. The interest in gold by these countries is good for the precious metal and, as a result, great for investors. Now is a good time to consider some gold small-caps that are affected by any news that affects gold.

The first company on our emerging gem list is Timmins Gold Corp (NYSE: TGD) with a market cap of $349.12 million. This gem appears to be unpolished right now and is trading at $2.53. The stock currently has a one year low of $1.45 and one year high of $3.47 with a PE ration of 10.54.

From all indications, Timmins appears to be in dangerous waters and investors may need to tread softly. Yet Timmins has a strong balance sheet if we consider its financials in the last 3 fiscal quarters. More interesting is that Timmins has forecast the production growth for fiscal 2013 to be within 125,000 and 130,000 ounces of gold

The second small-cap on the emerging gem list is Novacopper Inc (NYSE: NCQ) with a market cap of $104 million. The price to earnings ratio stands at 2.94 and the 52-week range shows a somewhat wide margin of a $1.65 low to a $4.76 high. However, it may interest you to know that Novacopper is still profitable despite gold movement because it has a safety net in its silver and copper interests.

Investors would be smart to pay attention to our third emerging gem; Fortuna Silver Mines Inc. (NYSE: FSM) with its $511 million market cap.  Buying Fortuna may be a smart move right now if you would like to be a part of the growth that comes from its production guidance of 4.4 million ounces of Silver and 23.3 thousand ounces of gold in the current year.


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6 Responses

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  1. Lillie
    Mar 12, 2013 - 11:09 AM

    As the Conquistadors used to say, “Gold, Glory and God”. Am apt to think the market has the same motto, with God not in the equation.

  2. Innovictor
    Mar 12, 2013 - 12:16 PM

    Forgive my optimism, but I don’t think you can go wrong with gold. @ Lillie, that’s a nice mantra.

  3. Fjournalist
    Mar 12, 2013 - 01:53 PM

    For centuries gold has been a precious commodity and I don’t think that will change anytime soon. Countries that are using gold to keep in their federal reserve will realize its true importance a couple of decades down the road.

  4. Brian Prescott
    Mar 13, 2013 - 08:30 AM

    More than Russia and Kazakhstan, a full blown recession in the Eurozone stands to push gold prices higher. The yellow metal is already on its way up and could cross resistance levels.

    • Khangelani Hlongwane
      Mar 23, 2013 - 12:03 PM

      during such unceratin economic times, the rush is for gold as a safe heaven

  5. Lennox Yieke
    Mar 24, 2013 - 07:03 AM

    You can never go wrong with Gold. Ever since linguists coined the word ‘history’, Gold has always been associated with value and I am certain that this will hold.


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