Buy These 3 Canadian Gold Mining Stocks
Jaiyant is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Gold has always had this image of being a stable investment option. That it either increases in value or remains stable and that it is never a bad idea to invest in some gold. That may not always be true, if we consider how gold prices have moved back and forth like a pendulum recently. Gold stocks, meanwhile, are directly or indirectly influenced by gold prices and make for similar investment options.
However, purchasing gold stocks that belong to companies located in business-friendly and secure locations such as Canada is a good idea. While Canada’s GoldCorp and Barrick Gold are famous all over the world, most people do not read much about these gold stocks which are promising as well. In this article, I shall discuss three gold stocks that are based out of Canada, are affordable, and hold a lot of promise for the future.
IAMGOLD is an affordable gold mining stock
IAMGOLD (NYSE: IAG) is based in Toronto and is engaged in development, exploration and production of minerals across the world. This international gold producer has a lucrative gold mine at Mouska, just northwest of Montreal. It also operates mines in Suriname and Mali. Its Niobec mine in Quebec is North America's only source of niobium. In January, IAMGOLD announced that it was reducing its operations in Mali because of the conflicts affecting the country.
IAMGOLD's shares are very affordable at $5.29, and the stock price will increase in coming months. Stopping its operations in Mali has had a negative influence on the company, but now that Mali's security conditions are improving, IAMGOLD is likely to increase its production. Moreover, it has large mines in Canada already, which operate without such security or business risks. With a profit margin of almost 14% and an operating margin of 30%, IAMGOLD is one of the most profitable gold stocks at the moment. Most analysts believe that it is a great idea to buy IAMGOLD as well.
Buy this oversold stock for future stability
AuRico Gold (NYSE: AUQ) is a Halifax-based intermediate gold mining company that also has silver and copper assets. It used to operate only in Mexico until 2011, when it was known as Gammon Gold. The company’s Young-Davidson mine in Ontario has more than three million ounces, which gives the mine a life of more than 15 years. AuRico Gold's Ocampo mine in Mexico produces both gold and silver. The company's El Chanate in Mexico began production in 2007. All in all, AuRico Gold is an attractive and stable gold mining stock that has decades of future.
What interests me the most is that its shares are getting oversold. Forbes wrote that AuRico Gold entered 'oversold territory' on Friday. It is changing hands for as low as $4.32, which means the process of selling is going to exhaust itself soon. This in turn means that the share prices will increase in the future. Investors can purchase this gold stock when it is cheap and affordable, to enjoy the returns in the coming years. With a profit margin of 25.76% and an operating margin of 21.56%, AuRico Gold is a very attractive Canadian gold mining stock.
Green and sustainable mining stocks are always attractive
Toronto-based Kinross Gold (NYSE: KGC) owns nine active gold mines on four continents. The company owns mines and projects in Canada, the U.S., Russia, Ghana, Mauritania, Chile and Brazil. With a strong commitment to responsible mining and environmental friendliness, this is one gold mining company that will avoid a lot of potential lawsuits from green activists and governments. That alone makes Kinross Gold a very attractive company to invest in. Maclean's magazine named Kinross as one of Canada’s Top 50 Most Responsible Corporations in 2009.
The adjusted earnings and revenues of Kinross Gold during the first-quarter of 2013 beat analysts' estimates. Consequently, Zacks upheld a neutral value despite a weak gold price. Moreover, Kinross Gold's production was increased during this quarter, and that trend is likely to continue in the coming months. It has a market cap of $7.16 billion and an enterprise value of $8 billion. At $6.27, Kinross Gold is not only affordable, but also presents investors with huge opportunities.
Canadian mining stocks are vastly more attractive than other nations' miners because of the stable and secure business environment one finds in Canada. Moreover, many of these gold mining companies are doing exceptionally well. IAMGOLD, Kinross Gold, and AuRico Gold are all attractive and smart investment decisions not only for Canadians, but also for international investors.
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Jaiyant Cavale has no position in any stocks mentioned. The Motley Fool recommends American International Group. The Motley Fool owns shares of American International Group and has the following options: Long Jan 2014 $25 Calls on American International Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!