Barrick Mining (ABX.TO)

(Has a small Short position on this.) Over the long-term, central banks are going to continue doing what they have been doing and that has historically been very inflationary for asset prices. Precious metals should be one of the largest beneficiaries of this. Problem with the company is related to some of the decisions they have made in the past and the overhang that this has created for them. Their actual financial fundamentals are not incredibly strong at the moment. There are better companies in which to play gold.

Trading like it is a broken company. People are focusing on Pascua-Lama right now where production has been held up. Even if you took this asset out entirely, the NAV of this company would still be in excess of $25. This is an opportunity to buy a stock that is trading at somewhat ridiculous multiples. Yield of 4.22%.

He wants to be in the ones that are going to move because they can increase production and have the leverage. He would rather be in the ones that are definitely going to outperform. Feels management has made some bad decisions.

He prefers mid-cap gold stocks with a better growth profile. ABX have lots of issues. They need some capital discipline. He would stay away from it. This is not the time to buy gold – wait for mid- to late- summer. Prefers YRI-T.

On a 20 year low and is due for a bounce sometime soon and it might get it into the low $20’s so if you own, he would sell at that time. You need to see some fundamental improvements, particularly in terms of Pascua-Lama, which is on hold currently. There will be some balance sheet concerns until all of that is clarified.

It’s a tough call whether to stay in or not. They have a lot of debt. Not the best stock in the sector. He prefers G-T.

This has been a disaster. Chilean project is going to cost them $75 million a month just to keep staff on while the environmental issues are flushed through with the water run off. Dead money. Gold prices are probably going to flat line.

Lost all patience with this stock and sold his holdings. Very unhappy with the Chilean situation. Very political. 4.5% yield.

RSI is ridiculously low at single digit levels. This is called “How to catch a falling knife.” Clearly in a downward trend and is underperforming the market. Historically, the stock has some good seasonal patterns. Usually around July-September.

Feels gold got so crowded and everybody kind of drank the Kool-Aid so what you are seeing now is just a wreck in gold land. At some point these things become way over done and way oversold. For a “trade”, you could probably get this company and a lot of gold companies now.

She likes gold long-term and feels that everyone’s should have some exposure. Prefers Goldcorp (G-T) as their growth profile is very visible in terms of their production growth. Also, the regions they are in are low political risks. Barrick is going through quite a bit of management change. Retrenching their spending and focusing more on their returns.

Thinks gold will hold its support at $1525. Once that price firms up, he feels we will get higher pricing. This company had disappointed the market on both their production outlook coupled with the sum of the cost estimates, which continue to skyrocket. He prefers others.

A lot of the precious metals are trading extremely cheap. Lost their rich multiples as a result of a pull back in the commodities. This one is a very interesting name at these levels. Has been a lot of talk of a potential corporate action where they would either break up the company or reformulate the structure of the company to increase in value. For example putting some of their assets into a royalty structure. (He is not constructive on precious metals, so you may want to find a hedge for this trade.)

(A Top Pick April 13/12. Down 26.8%.)

(Market Call Minute.) Extremely cheap at 3X cash flow.