Eldorado Gold (ELD.TO)

Gold is having a difficult time because of the strength of the US$. This one is a nice speculative trade possibly; depending on what you think happens in Greece. Gold looks like it is going to be tough for a few more months before there is a rally.

(A Top Pick Feb 28/14. Down 26.69%.) The project is good, but there is that uncertainty about what is going to happen in Greece. Not adding to his position and waiting to see what happens. (See Top Picks.)

This is in the development stage and has a lower cost of production. His company just reduced their target to $9.50 US.

Likes this company. Stock has been in a broad, swinging sideways movement and is doing quite well against the golds in general. Like all golds, it has no particular upside potential based on the current price of gold. This is a good one.

Probably the lowest cost producer in the big cap space that he covers. Basically no debt at this time, because they were not getting permits. They are getting close to getting some of those permits, but have the liberty of holding back if gold prices are too low. They should be obtaining permits in China over the next 6-12 months for their Eastern Dragon mine, which should eventually lead to listing the Chinese assets to Hong Kong or selling part of the assets. A great catalyst beyond the gold price. Yield of 0.23%.

This had a very high Short position and gold stocks were out of favour. Chart shows this had a massive underperform from 2012 into 2013, and then it started to change and the gap started to close. Started to relative outperform in early 2014. He likes the gold space.

Likes this one. Likes the balance sheet, the income statement, their ability to build mines and their ability to operate mines in many different places and in many different cultures. Dividend yield of 0.2%.

(Market Call Minute.) Recently came out with some good results.

(All 3 Top Picks are 1) out of favour 2) high Short position and 3 ) displaying positive relative performance. An ideal setting for a Short Squeeze.) One year chart showed a horrible Down in late 2013. This was followed by market perform through to March, followed by Under Perform with a tremendous upward move in June.

In the 30-35 years he has been doing this, he either has too much gold or too little. It is very, very hard to predict. If he plots gold stocks against gold bullion, there is only one stock that he is aware of that has outperformed gold bullion, Franco Nevada (FNV-T). He is not big on individual gold stocks. If he were to pick one, it would be Agnico-Eagle (AEM-T ). He would much prefer to buy bullion iShares Gold Bullion (CGL-T), or if you stick your neck out, Agnico-Eagle.

This stock is finding support at around $5.80. You don’t want to see it break this. There are a couple of descending peaks which is a sign of danger. The downtrend is still in place, but there is starting to be some consolidation at the lows. Wouldn’t jump in until it breaks past the old high. At this time there is no sign of a new trend emerging.

The catalyst is permits in a number of countries. This is a low cost producer with cash on the balance sheet. It has a higher political risk profile than others so you might not want to get involved right now.

He owns iShares S&P/TSX Global Gold (XGD-T) and Agnico Eagle (AEM-T). Chart shows several lows for the year with the last one being a higher low. Golds tend to have their strongest periods in the summer and then again in early winter.

Over the last 10-15 years has been one of the best performing gold stocks in terms of building mines, low cost of production and making profits. In the last couple of years all these stocks went down. Off about 70% from its highs. Still growing their production and are at about 720,000 ounces right now. Ultimately they will be doubling that.

Not as thrilled with properties and growth going forward. Charts look good but give it a couple of days and see if we are starting a correction. You might get a pull back for a while.