Feb 29, 2012

Posted by in Commodities | 0 Comments

Facts About The Best Gold Stocks

Best Gold StocksInvesting in the best gold stocks is a wise move, as gold has performed well under all market conditions. Gold prices have moved up steadily, irrespective of the movement of the stock market or the dollar. Price of bullion gold has soared in times of inflation, as well as in periods of deflationary worries. Although there are consistent gains, one should not conclude that this precious metal has peaked, and there is not going to be any more gains.

Suitability of Investing in Best Gold Stocks

Gold is now behaving more like a currency rather than a commodity. However, this does not mean you start stocking coins and jewelry. Storing bullion has many security issues, and there is always the risk of being robbed, and losing all your investments. The best alternative is investing in the best gold stocks, so that you can make the best of gold gains, without worrying about security. Secondly, gold stocks have increased in value, almost five times more than actual gold itself.

How to select the Best Gold Stocks

There are many companies out there, and hence one has to select the best gold stocks for receiving high returns. First, one needs to concentrate on only those companies that are actually producing gold. There are many companies, who are in the exploration stage, and these can be quite risky investments. Secondly, the gold producing companies must have done a feasibility study, where it is considered economical to extract the gold. Last of all, check out how the large gold producers have acquired their capital, and the terms associated with it. Equity and debt both have their plus and minuses, that can affect the profitability of the company. However, these are only the main points, and lot of other research is involved in picking the right stocks.

Best Gold Stocks for Investing in 2012

Kinross Gold Corporation (KGC) looks promising, as the company showed 13% increased gold production in the third quarter, and a revenue increase of $1.06 billion. Debt to cash ratio also is quite good, with cash at $1.88 billion and debt at $1.44 billion. Book value per share is $13.27, while it is traded at around $11.

Another solid company is Goldcorp (CG), which is trading around $46, with a book value of $25.76. The yield of dividend is 1.20%, with a price earnings ratio of 23:31. The cash and debt balances also look very promising, with cash at $1.48 billion and total debts amounting to only $7.26 million, making it one of the best gold stocks.

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