John:
RE. Agnico (AEM)...
I'm glad I didn't see the low on OSK. Might have panicked! It seems to have recovered well.
I opened a position in the Agnico warrants today. You might like to take a look at it. I got the tip from a post on the Zinc thread...
Message 23000415
Thanks Chuckles Bee!
AEM had a remarkable last quarter and the 4th quarter looks even better, due to the large amount of zinc they produce as a byproduct of gold production. I estimate that in the 4th Qu they'll produce gold at a cash cost of NEGATIVE over $1,000 per ounce! This would have a remarkable effect on their balance sheet, which is already doing extremely well. Imagine... for every ounce of gold they produce, they put $1,000 in the kitty, and they've still got the ounce of gold!!
Anyway, check it out. If you like the story, you can get great leverage on this using the warrants (AEMLW on Nasdaq). They trade in US$, but are more liquid on Nasdaq than in Toronto. They're marginable and also well in the money and trading at about half the stock price -- so if you get some on margin there's a chance of 4 to 1 leverage to the stock. And both stock and warrant are at the top of a major consolidation channel. If they break out (which they will if POG keeps going up), then look out above... :^)
The only downside IMO -- apart from the leverage if POG actually goes down <ng> -- is that the warrants expire Nov 2007. But they're well in the money and I see this as a medium term play on the POG -- next 6 months say. And IMO there's a good chance AEM will be one of the next takeover targets with numbers like these. I don't think the market has fully factored in the effect of these zinc numbers. If the stock doubles, the warrants will more than triple and with margin this could be a 6- to 8-bagger on cash outlay.
Do your own DD, and best of luck!
Howy |
