Anyone follow ASA on the NY? Message Board

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Strategies & Market Trends : Anyone follow ASA on the NY?

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To: James Spence who wrote (1)	4/30/1997 10:06:00 PM
From: Dale Schwartzenhauer	of 15

James: thanks for the post, and welcome to this thread. My interest in ASA is their holding of South African gold stocks, which are more leveraged, for the most part, than the issues you mention. The value seems better too. The stock sells for 21 x EPS and sports nearly a 4% yield. That doesn't matter much for options, except it's more attractive for potential buyers of the stock. You're right about the liquidity and volume, it's poor. But it seems to me the stocks in the XAU are more overvalued as a group than the one's ASA holds. The PE ratio on many of ASA's holdings are around 5-6 x EPS. Compare that to 40 x EPS for ABX and NGC and you see my point. At major gold market lows, ASA usually trades at a discount to NAV, which is published weekly in the WSJ. So there may be a play here too. Still, there is the point of liquidity, which the XAU and these other vehicles handle much better. I did very well with ASA early last year, so I guess it's natural to try for a repeat performance. Best regards, Dale

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