Saturday, March 19, 2011

15 Miners That Should Come Screaming Right Back

Gold topped a couple weeks ago, on March 7 to be specific, and closed this past week just 2.1% below the all time high reached on that day.
Silver also topped on March 7th and closed this week just 4.8% below the historic intraday high reached at 36.75 on March 7.
That gold and silver have consolidated within literally a few percentage points of their all time highs, given the news events of the past two weeks, speaks volumes as to their relative strength and ability to withstand tremendous selling pressure.  When the selling pressures of forced liquidations, margin calls and downright emotional panic lift in the very near future, I have no doubt that gold and silver will break out and quickly make new all time highs.
But what about the gold and silver miners?  Are they, too, within just a few percentage points of their March 7 high? 
The answer is that a few are.....very few, in fact.  And within this fact lies a wonderful opportunity for an investor to get positioned ahead of the crowd before gold and silver break to new highs.
The purpose of this post is simple.  I would like to identify for you 15 quality mining stocks that are presently on sale.  They are on sale because the market panicked in the face of one disaster after another.  They are not on sale because they have some terrible bad news (that I am aware of, anyway).  Rather, they are on sale because investors temporarily blinked - lost their heads - took their eye off the ball, and so on. 
And I do not believe these miners will be available at these sales prices much longer. Recent selling pressure will subside, and when investors begin to think about which companies will have great future earnings in the current environment, these stocks will be right back up to their normal price of two weeks ago and then go much higher after that.
In making this list I simply noted the highest price the stock reached on March 7, the day gold and silver peaked, and using the closing price of this past week I calculated the percentage each stock would have to rally just to reach their March 7 high.
As I believe that gold and silver are about to move much higher, I presume these stocks will all regain their March 7th high.  As you will see, they are on sale - and some at steep discounts.
Finally, I encourage you to use this list as a starting point for your own research towards deciding how you will participate in the upward movement I believe is on the way. I wish for your success!
Gold - discount from March 7 = 2.1%
Silver - discount from March 7 = 4.8%
1.  SIL - discount from March 7 = 14.2%
2.  RIC - discount from March 7 = 14.5%
3.  SLW - discount from March 7 = 16.2%
4.  AXU - discount from March 7 = 19.4%
5.  SVM - discount from March 7 = 19.5%
6.  VGZ - discount from March 7 = 20.1%
7.  XPL - discount from March 7 = 20.6%
8.  PZG - discount from March 7 = 20.9%
9.  CDY - discount from March 7 = 22.5%
10. GPL - discount from March 7 = 22.9%
11. MVG - discount from March 7 = 23.6%
12. HL - discount from March 7 = 23.7%
13. KBX - discount from March 7 = 25.3%
14. MMG - discount from March 7 = 35.5%
15. BAA - discount from March 7 = 36.8%


  1. Thanks much for the info., John. VERY valuable stuff. As you say, these guys'll be screaming MUCH higher over the next 2-3 months.

  2. P.S. You should put SLW into your stock quotes list.

  3. Thanks for the suggestion. SLW is there now!

  4. Good morning.....I have a couple of questions here. You had a post describing the potential of CDE. That same day it moved substantially, first lower and then higher and has now settled down a bit. Does your prognostication for this miner still carry.
    Also I am sitting on some P.TO at a great loss and hoping for a bounce here. What is your thought on this one and ECU.
    As always I really appreciate your work and look forward to your every post.

  5. Good Morning Graham.

    CDE closed Friday some 13% off its March 7 high and that compares favorably with most, if not all, of the other silver miners. CDE is coming off a blowout quarter, recently raising 2011 production targets, and as I pointed out in my article the technical setup for CDE is extremely strong. I'm not suggesting this is 'the' silver stock for what is to come, but I do continue to believe it will do very very well.

    I did some fast research on Primero Mining and looked at the chart. I am guessing that the market is not impressed that the previous management signed away a multi year commitment to sell a huge amount of their silver spoils to Silver Wheaton at $4 an ounce. The company did announce their first profitable quarter on Feb. 24 and for days the market mulled that over, holding price steady at around $4/share until silver peaked March 7 and then price headed south. I would think share price would return to $4 soon and possibly the next price resistance area of $4.50.

    ECU has traded north of $1.40 twice in recent months and closed this past Friday at 96 cents. Of the three silver stocks you asked about I think ECU has excellent odds to be the outperformer.

    But here is the thing I wrestle with Graham. The movement of silver price to the sky will last just so long, then it will blow up. I'm talking about 4-6 weeks. So the question becomes do I take this incredible opportunity and gamble with low priced iffy stocks, perhaps to hit a huge home run, or do I simply make sure I get a piece of the action with less risk and call it good?

  6. How do you rate these miners against EXK? I realize that EXK is only down about 10% at the moment, but which would you rather hold, one of these or one that has showed more relative strength?

    Le Fou

  7. That's another interesting question Le Fou.

    Honestly, I don't know enough about the details of each of these miner's fundamentals to be very helpful. I guess I would gravitate towards EXK and those near the top of the list.

    But my motive may be entirely different than yours.

    For myself, I would rather make sure I get something with this opportunity, than hit a home run or strike out. The stocks with the greatest relative strength would seem more likely to accomplish my objective.

    As an aside, Banro Corporation (BAA) at 37% off its highs two weeks ago looks like a great trade. I have watched this stock over the years and it kinda fools people. It goes down and down and sideways and down more and then it blasts off, making up for lost time in a matter of days.

  8. Just signed in to TSI.....what about AMPW? (American Power Corp.) it has been hyped up as a buy out by Rio Tino, but nothing has happened. Is coal on its way out? Is all the hype concerning Warren Buffet's Railroad (Burlington Northern)& his coal holdings being near AMPW just that, a bunch of Hype? you think AMPW will sell to Rio Tino for $25.00 per share?