All Gold Stocks Are Down, So Which Ones Are a Real Bargain?

All Gold Stocks Are Down, So Which Ones Are a Real Bargain?

Monday, April 6th Update: All of these mentioned on our site on Saturday are up as much as 6% at or near the open. 
Following yesterday's article on buying gold, I have had a number of members write me asking which gold stocks they should look at right now. It is true, gold is way down from highs in recent years. It is so depressed that I see owning the metal itself (in coin form) is likely the best way to put a portion of your non-equity portfolio in a very safe holding. Our site name is "StockGuru." That means I need to offer a few alternatives here. This is actually rather easy, as none of the good ones are overpriced. Let's start with Eldorado Gold Corporation (NYSE: EGO / Toronto: ELD). Screenshot 2015-04-04 13.44.04When you look at most of the top producing gold stocks, they are NOT profitable right now. Eldorado is.  Most have a cost per ounce exceeding $1000.  Eldorado's cost is described this way: “All-in sustaining cash costs averaged $779 per ounce; cash operating costs averaged $500 per ounce.” (SOURCE)Eldorado has just over a half billion in cash (CDN) and full liquidity of CDN $876 million. That's incredible. Most are struggling with cash flows, as they are really just not doing that great at gold near $1200 per ounce or less. Another strong one: Franco-Nevada Corporation (NYSE: FNV / TSX: FNV). Screenshot 2015-04-04 13.45.37From their March 25th release: 2014 FULL YEAR HIGHLIGHTS

  • 293,415 Gold Equivalent Ounces1 – a new record and 22% higher than 2013; (note: almost a third of this was from 4Q)
  • $442.4 million of Revenue – a new record and 10% higher than 2013;
  • $356.9 million of Adjusted EBITDA2, or $2.37 per share;
  • $137.5 million of Adjusted Net Income3, or $0.91 per share;
  • $106.7 million of Net Income which includes $31.5 million in impairments, or $0.71 per share;
  • $930 million invested or committed acquiring 14 new royalties and streams; and
  • $500 million in equity capital to finance further growth.

Some other well-known and loved gold stocks doing reasonably well:GoldcorpScreenshot 2015-04-04 13.42.49Goldcorp (NYSE: GG / TSX: G) is not as profitable as in years past, but it is doing reasonably well. This is one of those that has costs of over $1000 per ounce (as of 4Q, total year was less), and that makes its margin far smaller than the ones I like. Newmont MiningScreenshot 2015-04-04 13.41.06Newmont Mining Corporation (NYSE: NEM) is very strong. They have turned around the losses of 2013 into  profitable 2014. That trend should continue. Should we see higher prices of gold, the company will benefit far more than they would have before the changes they have made in the past year. The Company has a thorough press release with financials published February 19th that details everything. OVERVIEW: Find a gold stock that is profitable right here and now, and you have one that will make out terrifically as gold moves up in price. Beware of the tiny gold stocks that don't really have anything going on. Soon I will publish a list of the Canadian Venture and some US OTCQB and Pink Sheet gold stocks that have some potential - if things go very right for them. 

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