Agnico-Eagle Mines (AEM.TO)

Probably in a “pause” situation, as it has been for the last few months. This might be that December time, when it breaks above the downtrend that has been going on since mid-2016. He would look at this in December. Overlay this with the underlying commodity just to see how it is acting. If it is starting to move ahead of the commodity, that is probably a pretty good sign.

This closed at $45.52. He has a model price of $29.72, a 35% negative differential. Fundamentals do not support the price. There is better value elsewhere. Gold continues to languish in price.

He really likes management. They’ve done an excellent job over the last number of years of increasing production per share and cash flow per share, largely from internal organic growth. Has a good growth profile over the next 5 years. His only problem is that valuation is relatively quite high at the moment, although it deserves it. (See Top Picks.)

This has always been one of his favourites. They have great mines, a lot of Canadian stuff, which is what he likes. They know how to struggle through problems, and are very good at actually buying interesting choice potential development assets.

Covered Call. Gold stocks fall most of the time in the top 25% in the top quartile of option premiums. You get a higher option premium against gold than almost any other sector. Secondly gold stocks, longer-term, don’t tend to go very far. They’ll rise significantly during a market downturn, and then settle back. Because there is a lot of volatility, they pay a high option premium. This is one of the better gold companies in Canada. He is looking at selling an At the Money Covered Call, and he thinks you can consistently do that. Dividend yield of 0.84%.

A gold producer, and she doesn’t own a lot of gold equities. If she decided to increase her weighting in gold, this would be a name she would go to.

A Canadian focused gold miner. He is bullish on gold in general, and this has always been a very well liked name. Canadian gold miners are getting hit as a result of the strong Cdn$. If you want to own a Canadian focused miner, this is as good as any.

(A Top Pick July 5/16. Down 14.54%.) This is a time to be in gold stocks, and this is the premier “go to” name in the Canadian gold patch. The pipeline on this looks really interesting on a go forward basis.

(A Top Pick July 5/16. Down 12%.) At that time, this was running up and gold looked much better. Believes this is the premier company in Canada. They’ve been very good at bringing up mines. A growth business that happens to be in the gold mining industry.

(A Top Pick March 31/16. Up 21%.) He kind of liked the gold market at that point. Today, he is quite intrigued because they have a combination of growth and low cost mines. A Canadian high quality production. To him, this is a core holding in the gold sector

One of the premier Canadian gold miners. Producing about 1.65 ramping up to 1.7 million ounces a year. Reasonable cash costs. Not a cheap stock, but they’ve done an incredible job and have a lot of growth behind them. They are also investing in a number of junior companies. Very good management. He likes this.

(A Top Pick Feb 8/16. Up 29.61%.) The forecast at the time was that the long-term price of gold had bottomed and was headed up. Still thinks there is a good opportunity for gold because of rising inflation over the next couple of years.

There are a lot of systems for analysing companies. For something like this, you would have to look at “momentum”, and that is built into his system, but he only looks at stocks that are under $5.

(Top Pick Mar 31/16, Up 35.38%) The sector recovered. It is a wonderful gold mining company that he continues to own. He is looking to add more somewhere around here. It is the premier gold stock in Canada.

The company has done pretty well. He is not a big believer in gold. Prefers Goldcorp (G-T).