True Confessions -- Admit it -- you bought <i>that</i> stock Message Board

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Pastimes : True Confessions -- Admit it -- you bought that stock

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To: carranza2 who wrote (851)	10/21/2009 2:01:40 PM
From: Real Man	Read Replies (1) of 990

It's just a dirt cheap gold stock with an excellent balance sheet. Per Yahoo, p/e is 15, p/M&I reserves is about $17 per Oz. Pays a bit of dividend. For comparison, KGC has negative earnings and p/M&I reserves of above $200 per Oz, but it was as dirt cheap in 2000 when it traded as low as 35c per share. Overall, gold stocks simply can't be valued higher than POG for their M&I reserves. That would be very,very bubbly. Miners are holes in the ground with gold inside. Can't cost more than the gold. Once the gold is gone, the value is zero. Period. Which it a natural limit that might explain their underperformance relative to gold. Obviously, the fact that miners got no gold is not bearish for gold, but bullish, but it's bearish for the price of that miner's stock. -g- An average of $100 per M&I (typically what another miner would pay to acquire reserves) gives DROOY a value of $42 per share. KGC - type valuation gives it $100 per share. Overall, RSA miners, with the exception of AU, are valued well below the typical resource acquisition price of $100 per Oz of M&I resources.

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