Top picks 2012: Iamgold
Gold miner has production volume, growth projects and seasonal factors in its favor.
By Curtis Hesler, The Professional Timing Service
There was a study done in the 1970’s that revealed that gold stocks tended to bottom in the fourth quarter and rally strongly into the end of the first quarter of the next year. Thus, looking for seasonal bargains in the gold sector makes sense, especially now.
Gold topped out at over $1,900 an ounce in August and September. It corrected to a low of $1,535, and has since consolidated around the $1,700 level. There is significant support at $1,600, but I don’t expect it to dip that far before the next big rally leg begins.
I am confident that we will see gold significantly higher in 2012, perhaps with new highs by March.
Another attraction is that the average gold stock is currently cheaper than it was during the great crash of 2008. Now is the time to do a little gold mining and buy Iamgold (IAG).
Iamgold operates five mines and has some very interesting development projects in the works. Moreover -- and this is crucial -- it is producing a million ounces a year.
Gold mining is a capital intensive enterprise, and these days money is harder to find than gold. You need to have production, cash flow, and growth projects you can exploit from internal cash. Iamgold has all three, and even pays a 1% dividend. That is not all that outstanding, but it's comparable to a CD and has the potential to double during the next leg of the gold bull market.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Like many companies this winter, the fast-food giant blamed a drop in same-store sales on the weather. But could its problems be bigger than a snowbank?
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.