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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Rarebird who wrote (74329)	8/1/2001 6:16:02 PM
From: Stephen O	Respond to of 116834

Jon Embry in Globe and Mail Best Bets: Manager sees glitter in gold stocks globeandmail.ca SHIRLEY WON From Wednesday's Globe and Mail Fund manager John Embry says he has been seeing more opportunities lately in gold stocks -- a traditional hedge against inflation. "Given the amount of monetary stimulation that is taking place -- if the economy responds positively -- we think there would be considerable inflationary pressures," said the vice-president of Canadian equities at RBC Global Investment Management Inc. The U.S. Federal Reserve Board has been easing its monetary policy, including cutting its key rate six times this year to stimulate the economy. "If [the economy] doesn't respond, and they continue to pump a lot of money into the system, I think you are going to see stagflation," he said. Stagflation -- a term coined by economists in the 1970s -- refers to a combination of slow economic growth and rising prices or inflation. "Both of those situations are good for hard assets like gold," he said. Mr. Embry, manager of Royal Canadian Equity Fund, has boosted his gold weighting to 7 per cent of that fund, compared with 4.5 per cent for the Toronto Stock Exchange 300-stock index. (He also runs Royal Precious Metals Fund.) The manager, who buys growth stocks at a reasonable price, has overweighted bank stocks in his Canadian stock fund, describing this move as "defensive" in case the economy doesn't rev up soon. Mr. Embry has trimmed his overweight energy position, selling stocks such as Anderson Exploration Ltd. and Alberta Energy Co. Ltd. because the sector is going through a "seasonally weak period." But he likes this sector long term. Stocks he has bought recently or added to existing positions include: Meridian Gold Inc. (MNG-TSE). The Reno-based gold producer and exploration company, which closed Tuesday at $13.50, hit a 52-week low of $7.25 last November, and a 52-week high of $14.20 in May. He likes Meridian, which operates in the United States and Chile, because it is well-managed, debt-free and a low-cost, unhedged producer. He has a one-year, $20-target on the stock. Inmet Mining Corp. (IMN-TSE) The Toronto-based international mining company, which closed Tuesday at $2.35, hit a 52-week low of $1.60 in March, and a 52-week high of $2.80 in May. Inmet, which is essentially debt-free, is a "cheap, out of favour" stock, he says. "It has tremendous leverage in the event that copper or gold prices go up." Teck Corp. (TEK.B-TSE) The Vancouver-based mining and metals company, which closed Tuesday at $11.67, hit a 52-week low of $8.75 last August, and a 52-week high of $17.90 in April. The stock is down because of an "ill-timed" purchase of Cominco Ltd. this spring, he says. Teck slowed its zinc production to sell electricity to the United States only to see power prices fall. He says the stock is cheap, trading at less than its net asset value of more than $20 a share.