Well guess what. Here is your chance to have the last laugh no matter how sick and tired you are of getting the short end of the stick with this or any sector of the stock market. This article will quickly show you a dozen gold and silver miners that will give you the very opportunity to 'buy low and sell high' you have grown weary of hearing. The potential at this very moment is simply mind-boggling.
The mining sector, by every metric known to stock analysts, gurus and the rest of us, is now selling at a discount - an enormous discount - to the underlying product of their business which is, of course, mining gold and silver. Prices of mining shares are quite literally at lows seen maybe 5 times, if that, in the past 100 years.
Companies and their stocks can be valued in a variety of ways and I don't think there is a particular evaluation method that singularly gets the gold star. But it has always made sense to me to ask this question: "if I bought this entire company - every single share of it - and then decided to tear the company apart, first paying the creditors then liquidating the assets at a fair market price, how much money would I then have?"
And, "would I have more money because I bought the company at a discount to its fair tangible value or would I have payed a premium that entirely evaporates into a loss for me when the value of the pieces are completely sold off?"
Using this evaluation method, that is, finding gold and silver miners that are selling for less than their tangible value, I constructed the table below to include the 12 miners that I found to be priced by the stock market even lower than their tangible value. And if you look at their 2013 earnings projection you will note that most have decent earnings ahead - some even project explosive earnings.
The column Price / Book Value is where you will find the degree to which each miner is discounted.
A reading of 100% would signify that a miner is selling exactly at its tangible book value. Most miners today sell well above 100%. For example, Goldcorp (GG) sells for 130% of book value. Barrick Gold Corp (ABX) sells at 230%, Newmont Mining Corp (NEM) sells at 140%, and Gold Resources Corp (GORO) sells at 730% of tangible book value.
Here is my carefully researched list where everything is selling below book value. And should you do a little further research by looking at the charts of these miners, be sure you note the price of the stock when gold was nearing $1900 in 2011 - because once gold gets back on the bull and starts bucking higher, those prices could easily become your selling price.
|Click on any chart to ENLARGE|
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