Agnico-Eagle Mines (AEM.TO)

As gold is out of favour, he loves this from a contrarian view. It is the best gold company with a great growth prospect up North. Gold will come back in favour at some point. When the US dollar weakens, gold will benefit. Yield 1.3%. (Analysts’ price target is $65.64)

Gold is an enigma--sometimes is a currency or a hedge against inflation or something else. What's holding back gold now is that it's the inverse of the U.S. dollar--which has been strong this year. Producers like Agnico have operating leverage--when gold prices rise, their prices and earnings will rise disproportionately more than the commodity. Agnico has several mines operating well. It's a good house in a bad neighbourhood.

(A Top Pick August 28/17 - Up 5%) Covered call selling JAN 60 calls. They were called away.

Gold has been hit, though gold stocks have held up. July 27-September 25 is gold's seasonality. He likes AEM, because it's had a consolidation (following a downdraft earlier this year) and gold is entering seaonality, This should do well.

One of the best-run companies. He's excited by the price dislocation with the recent pullback in gold prices. Agnico is holding on well. They've had a lot of cash and have been acquiring over the years. Good management and has assets in safe geographies. A fine company.

This would have to come down a long way for him to have interest in it. The overall market has been very strong, it is not clear which way the market will go in the future.

The commodity is going one way and the stocks are going the other. It has always been the darling premium amongst the names. They are expensive for a reason. He finds opportunities at lower PEs. He sees greater value elsewhere.

Liquidity has not gone here. It is the premier gold name. Best growth over the next few years. It is a well managed company. They built this brand new camp in Nunavut. (Analysts’ target: $54.13).

(A Top Pick Dec 28/16. Up 5.03%.) Chart shows a downward triangle, and the stock may have broken out recently and it looks really quite bullish. If you didn't own a name, this is one he would be comfortable with.

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.