RE:RE:Best timeVery informative article on Kitco by Sprott, if any missed it.
Yesterday I raised my target, sell it all, price for EDV to a $100. For awhile I was frustrated with the price action and would have accepted $50.
What Sprott said is mostly what most are probably thinking , but layed out in clear terms. One thing that was interesting that based on EBITDA, free cash flow, return on capital, net debt to EBITDA, and profit margin; gold miners are twice as 'good' as the general stockmarket (S&P500) , and valued at 1/3. So if gold miners were valued the same as S&P500 companies the share price would be x6 where it is now.
That would put EDV at about $150, but since I am not greedy $100 will do. A $20 billion market cap for EDV seems reasonable if: gold goes to mid $2,000 or even $3,000; they increase production to 2 mil oz per yr sometime end of next year; and as the air comes out of the general stock market, a little of that flows to the cash cows that are the gold miners.
Sprott also explained the recent sharp drop in gold prices which was interesting, and made the argument again why gold prices will rise.