Tags: gold | silver | JPMorgan | miners

JPMorgan: Time Is Ripe For Bottom-Feeding on Gold, Silver Miners

By    |   Tuesday, 24 December 2013 02:14 PM

Just when gold and silver miners look the bleakest is when they are the most attractive, according to metals analysts at JPMorgan.

24/7 Wall Street
said that while 2014 may appear to be shaping up as a rotten year for miners, JPMorgan believes there is some overlooked value to be found among the waste.

“Central banks around the world are printing money at a furious pace, debasing the value of their local currency,” 24/7 Wall Street reported. “So whether it is a question of gold and silver as a hedge, an industrial commodity or simply a straight contrarian stock trade, the JPMorgan team thinks now is the time to look hard at the top names.”

All of the miner names recommended by JPMorgan trade on the New York Stock Exchange.

They include Eldorado Gold Corp., Goldcorp, Newmont Mining and Silver Wheaton. The heavyweights among them are Goldcorp and Newmont Mining, both among the world’s largest and best-known miners.

Goldcorp has very deep pockets to withstand a profit drought while gold prices recover. The company has about $1 billion in cash and $2 billion in undrawn credit, 24/7 Wall Street reported. The company is also nearing completion of a giant new mine in Argentina.

Newmont Mining is also a very strong company with deep resources. JPMorgan said it has a reliable 3.3 percent dividend.

For the more adventuresome investors, JPMorgan recommended Compania de Minas Buenaventura, Peru’s largest mining company, and Eldorado Gold, a low-cost producer with holdings in Turkey.

Silver Wheaton’s business model is a bit different in that it simply buys royalty interests in mines at a fixed price rather than investing in production or marketing.

Bloomberg reported this month that market participants and regulators are worried that the protocol for establishing the price of gold in the marketplace “may lend itself to insider trading and other forms of unfair dealing. The available evidence strongly suggests manipulation and, given the structure of the market, possibly collusion.”

Global regulators are currently investigating how banks have manipulated benchmarks that influence the trading price of everything from mortgage loans to foreign currencies, according to Bloomberg.

Gold and silver prices have plunged to multi-year lows in 2013, with gold down about 28 percent year-over-year.

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Just when gold and silver miners look the bleakest is when they are the most attractive, according to metals analysts at J.P. Morgan.
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2013-14-24
Tuesday, 24 December 2013 02:14 PM
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