Category

Buy Sell Hold

The Outlook for Gold and the Dollar Make Newmont Mining Corp. (NYSE: NEM) a "Buy"

By , Money Morning - • Print | Email

Newmont Mining Corp. (NYSE: NEM) is one of the largest mining companies in the world. And like Goldcorp Inc. (NYSE: GG), which I discussed last week, it stands to profit handsomely from any additional monetary stimulus enacted over the next few months.

So let's buy Newmont Mining Corp. (**), and hold on for as long as Federal Reserve Chairman Ben S. Bernanke is allowed to debase the U.S. dollar to help his friends in the banking industry.

Gold is hitting record-high levels in almost every fiat currency.

This bull market move up in gold hasn't gone unnoticed, either. There is a major buyer of gold future calls in the options market. The buyer of these calls is an extremely deep-pocketed buyer.

The size of this trade and the potential profits would be staggering if the price of gold breaks above $1,600 an ounce. I have seen estimates of $100 billion profit potential.

I honestly believe that only a central bank or one of the largest hedge funds has the capital and mandate to take this kind of risk.

If this trade starts to come into the money, and it is nearly there now, I expect that the senior gold producers will find a real market bid.

So let's talk about Newmont.

Click here to continue reading...

Goldcorp Inc. (NYSE: GG) is a Gold Bug's Best Friend

By , Money Morning - • Print | Email

If gold is the can't-miss investment of the decade – and it is – then Goldcorp Inc. (NYSE: GG) is a can't-miss opportunity for investors.

We're talking about a company with huge, profitable gold reserves and no net debt, which means it's time to buy Goldcorp Inc. (**).

It was only a few short years ago that central bankers were the bane of gold and gold equity investors. This was the era when central banks loved to dump physical gold on the market at cheap prices. In fact, they loved it so much that they had to invent a selling quota system just to give everyone a fair chance to unload their precious metals.

But now things have changed. Non-stop money printing by central banks around the world and fears of sovereign debt contagion continue to drive the price of gold higher.

Indeed, gold has become the go-to investment of the past decade, turning gold producers into profitable growth centers.

And Goldcorp is in the perfect position to profit.

Click here to continue reading…

Read More…

Its Recent Pullback Makes Pan American Silver Corp. (Nasdaq: PAAS) a Bargain

By , Money Morning - • Print | Email

Pan American Silver Corp. (Nasdaq: PAAS) is a silver mining company that has experienced a significant pullback in price since hitting its high in March. That means patient investors have a nice chance to enter at lower prices while the market calms down.

The parabolic move up in silver prices this spring helped provide a real stimulus to the share prices in some of the mining stocks. When silver prices pulled back after the Chicago Mercantile Exchange (Nasdaq: CME) raised margin rates over and over, the share prices of silver producers were negatively impacted.

The hot money has fled the sector and won't be back for a while, with equity prices now trading in the middle of their 52-week range. This gives patient investors, who are not chasing the current money, a chance to add or increase their exposure to silver miners without paying a pretty penny.

Why Pan American Silver is a "Buy"

When I look at a mining company, there are a few things I have learned to look for: Is the company already leveraged to the gills? How leveraged is it to the upside of its sector? Is it operating at a profit? Does it have a track history of operating at a profit?

In the case of Pan American Silver Corp., the company passes the test.

To continue reading, please click here…

Read More…

Profit From a Market Misstep with Valero Energy Corp. (NYSE: VLO)

By , Money Morning - • Print | Email

The latest stock market pullback has given value investors a chance to go shopping again – and Valero Energy Corp. (NYSE: VLO) is a great example of the kind of steals that are available.

That is, Valero's assets are worth significantly more than what the market is currently pricing them at.

At its core, the company is a vertically integrated, independent crude refiner with ethanol production that can be blended into the feedstocks of its own network of gas stations.

Right now is the perfect time to be grabbing assets on the cheap, and Valero is giving us an opportunity that's too good to pass up.

So it's time to buy Valero Energy Corp. (**).

Click here to continue reading...

Buy, Sell or Hold: Bank of America Corp. (NYSE: BAC) Is a House of Cards on the Verge of Collapse

By , Money Morning - • Print | Email

Bank of America Corp. (NYSE: BAC) is one of the largest banking complexes in the United States. But its strategy of growing through acquisitions has left the company terribly vulnerable to an economic downturn.

That's why it's time to "Sell" Bank of America Corp. (**).

For complete disclosure: I worked for Bank of America as a teller 20 years ago. So I have a slight bias. I want that to be clear upfront.

Read More…

Buy, Sell or Hold: El Paso Corp. (NYSE: EP) Spin-Offs Will Unlock Profits for Investors

By , Money Morning - • Print | Email

You may be surprised to learn that there's still an energy company out there that's undervalued by the market.

It's a natural gas company that has two divisions, which makes it difficult to appraise.

I'm talking about El Paso Corp. (NYSE: EP).

Some investors bought the stock to hold as a pipeline company; others bought the stock to invest in an exploration and development company.

But in the end, no one quite knew exactly which it was. That caused its assets to be valued at less than the equivalent assets held by its peers. This locked-up value caused El Paso's stock price to stagnate for years, even as other energy stocks surged to new highs.

In the industry, we call this a value trap.

Read More…

Buy, Sell or Hold: American International Group Inc. (NYSE: AIG) Is Not Worth the Risk

By , Money Morning - • Print | Email

American International Group Inc. (NYSE: AIG) provides insurance services to an international market place. In 2008, the company was bailed out of its positions by the U.S. government, which owned 92% of AIG at its peak.

AIG last week priced new equity, allowing the government to unwind some of its position. The U.S. Treasury sold 200 million shares, or 15% of its AIG stake on Tuesday, but still has 77% ownership of the insurer and another 1.5 billion shares to sell before it is fully out of its investment.

That means this is just the first of many liquidity events. And you don't want to own a stock when you know that a company's largest equity holder is on a mission to get out of its position. Long-term weakness will prevail in this case.

So it's time to "Sell" AIG — until the U.S. government finishes diluting current shareholders by dumping its equity.

Read More…

Buy, Sell or Hold: 'Hold' Archer Daniels Midland Co. (NYSE: ADM) Until Commodities Come Back

By , Money Morning - • Print | Email

The great commodity pull back of 2011 has started.

Soft agricultural commodities in particular have pulled back a lot lately, generating what appears to be a buying opportunity in the sector. However, I believe it is still too early to dive into a new position in Archer Daniels Midland Co. (NYSE: ADM).

Archer Daniels Midland has experienced a major pull back in the last few weeks. But in my opinion, the stock price will need to show that it has bottomed, and started to trade on expectations of future bullish events before it is again a "Buy."

That means it's time to "Hold" Archer Daniels Midland Co. (NYSE: ADM) (**) – until the current pullback runs its full course and gives investors a safe place to reenter the stock.

Read More…

Buy, Sell or Hold: Silver Wheaton (NYSE: SLW) Is Just Getting Started

By , Money Morning - • Print | Email

I first recommended readers of this column buy Silver Wheaton Corp. (NYSE: SLW) on Oct. 10, 2010.

Since that recommendation, the company's stock has surged nearly 28% — but that's just the beginning.

You see, Silver Wheaton just announced another blowout quarter, and despite the recent pullback in the silver market, this company is destined for greater things.

In fact, at current prices, the stock remains a screaming "Buy" (**).

Here's why.

Read More…

Buy, Sell or Hold: ConAgra Foods Inc. (NYSE: CAG) Turning Up the Heat with Takeover Bid

By , Money Morning - • Print | Email

With inflation soaring around the world, food prices are surging. And mergers and acquisitions (M&A) among food producers have increased as a result.

At the forefront of this trend is ConAgra Foods Inc. (NYSE: CAG), which last week made a bid for Ralcorp Holdings Inc. (NYSE: RAH).

Ralcorp twice rejected ConAgra's overtures, but the maker of Slim Jims and Swiss Miss cocoa won't be deterred.

Read More…