Look, 90% of investors know IAG is totally oversold
Here are a few facts to keep in mind:
1) It is trading at less than 90% of tangible book value
2) the PE is now 8:1
3) the dividend is now 2.9% (much better than Treasury rates and Exxon or Apple divy)
4) the cash to debt ratio is 4:1
5) new operation are expected to DOUBLE profits by 2015.
And, of course, on average over time gold ALWAYS goes UP. Buy low.
On the negative side, gold has been soft lately. PM shares have been weak across the board. But I am having a real tough time refraining from buying IAG and ABX at these levels. Good luck.
And many of the same 90% are also wondering when if ever the price of IAG will recover. Face the truth, the IAG price decline, although recently more severe, has been happening for a long time- like over past 2 years. I do not believe it is caused by lower gold prices. It seems that most investors are just against IAG. I agree that it is way oversold, undervalued. But in general, it seems that investors are passing on IAG and looking elsewhere. IAG needs some stellar performance to recover and I do not see that happening in the short term. A really good acquisition at the right price that the market likes would help. As I recall, the IAG price dropped when they announced Trelawney.
I looked at the same valuation picture and didn't have a tough time at $8.42 then again at $8.39. Saving some powder and hoping they can't clear their heads so I can scoop up some at $8.00.
When Mali is secured, the anal ists will get over their jitters about conflict many kilometers away from mining. That's just one issue that will make this move up.
Good recitation of facts from numbers 1 through 5. If you do have some concern about the recent softness in gold itself you might consider that the price of gold has lagged way behind its true valuation and the price per ounce that the market should be giving gold considering that since gold made a new high some time ago central bankers around the world have printed more than $3 trillion dollars worth of their national paper currencies. Ray Dalio, manager of Bridgewater, makes the point that the true value of gold (as opposed to the transitory market value that often lags it) is based upon the total nominal value of all paper currencies divided by the total amount of gold in circulation. The printing press are certainly issuing paper currency a lot faster than miners can get the commodity out of the ground. The point is that gold is going up in value everyday even on days when it goes down in price in the commodity market due to mispricing because the central bankers continue to crank up the printing presses to pile up the dollars, euros, yen, pounds, marks, yuan, kiwi, even if the market has not yet priced in the appropriate valuation.
Agree. Another factor to keep in mind is that we are looking at the price of gold in relation to the US dollar. Same as the stock on the US exchanges. If you looked at golds value in terms of the yen or British pound it would be a completely different story. The yen has been falling apart. IMO, when you get to the type of fundamentals in 1-5 you are in bargain territory and buy. IAG has over $1.5 Billion in cash. Minimal debt. This will be confirmed in February's meeting. It fell too far too fast on the talk of higher production costs that would keep profits flat. Gee, only $1/share net profit on an $8 stock... hmmmm.
Those crooks created many "financial instruments" GOLD ETFS/ETNS, so they can hold Paper spot price down. Fraud on daily basis. If all of those Futures contract holders ask for delivery of real metal then Crimex would fall a part. There is maybe 20% or less real metals behind all those mountains of futures, options, shares and other paper, which supposedly "backup by GOLD". It's a fraud. Gold would cost $5000 or more by now already if not this paper manipulation game. How long can they manipulate Gold and Silver? That's the question.