Dundee: $21 price target on OsiskoGold continues to touch record highs, as the euro zone crisis spreadsand the U.S. Federal Reserve says it’s willing to ease monetary policyto combat a sluggish economic recovery. But shares in gold companieshave lagged the surging price of precious metal itself.
That may be about to a change, according to analysts at Dundee Securities.
In a note clients, Dundee says gold producers appear to be undervalued and offer an excellent investment opportunity.
“We recommend an overweight position in gold equities as the summerwanes and we head into the fall season, traditionally a great time toown gold companies,” Dundee says.
But, while they are bullish on gold companies, the analysts warn thatgold producer equities will not return to the days when they commandedtwo-and-a-half times multiples to their Net Asset Value (NAV).
“Much has changed in the past five years, including the advent of goldETF's (which act as competition for investment dollars), much strongergold and silver prices (that make it harder for some investors toenvision a doubling of prices going forward), and increased investmentamongst ‘generalist’ investors who we believe would likely balk atpaying large multiples to NAV or cash flow.”
The analysts say Aurizon Mines (
ARZ-T 5.9 -0.1 -1.67%) and Osisko Mining (
OSK-T 14.79 -0.25 -1.66%)offer the largest potential returns. Dundee has a ‘buy’ rating on bothstocks, with a $9.00 price target on Aurizon and
$21.00 price target onOsisko.
https://www.bnn.ca/News/2011/7/14/Gold-stocks-ready-to-surge-Dundee-.aspx