While gold and silver are up 30 percent this year, the mining stocks continue to lag.....
Why the gold market is about to change
While the competition with gold and silver ETFs will continue, mining companies are now inexpensive relative to bullion and investors will be rewarded accordingly.
Here are the four reasons why gold mining stocks are about to soar in the next few years:
1. After a 10-year bull market, good managers have finally returned to the mining sector.
2. Top mining companies are finally generating dramatically higher profit margins. Free cash flow is now “gushing” and will double in the next year as huge capital investments by the majors pay off.
3. Expect enormous consolidation as majors start buying up smaller producers, at startling premiums to current market prices.
4. New discoveries are expected as 10 years of new exploration is paying off, and the gains accruing to successful exploration efforts can be explosive.
How to invest in gold mining stocks
Rick is constrained by regulation from making recommendations.
However his clients report a fondness for:
From my perspective, I like Newmont Mining (NYSE: NEM, Stock Forum), which announced earlier this year that it would start paying out a substantially larger dividend and link its dividend to the gold price. It doubled its dividend to 30 cents per share two weeks ago. If gold exceeds $2,000 an ounce, it will raise its dividend to 50 cents a quarter, a three-percent yield, the highest in the industry.