Tuesday, October 2, 2012

Is Goldcorp (GG) a Good Deal at This Time?

Goldcorp (NYSE:GG) is one of largest gold miners in the world, although it has had a tough year in 2012, having just recently surpassed its price on January 1 of the year.

Lower gold prices and higher costs throughout the year have weighed on the company, although a rebound since the latter part of July where it was trading for under $33 a share has helped the company, as expectations of further stimulus, which were of course accurate assessments, helped push the price of gold up, along with its share price.

As measured by global resources, Goldcorp has one of the least expensive valuations of the gold miners. Others having competitive valuations based upon the same criteria are Eldorado Gold (EGO) and IAMGOLD (NYSE: IAG)

Also hindering the company for 2012 have been the drought which slowed production at its Penasquito mine, and also its Red Lake mine, where seismic activity interfered as well.

One positive for the year, and also going forward, is the 41 percent stake Goldcorp holds in Primero Mining (NYSE: PPP), which is poised to benefit Goldcorp as production at its San Dimas mine closes in on meeting full expectations.

With gold assuredly about to jump in the next several years, and support in place because of the open-ended QE3 implemented by the Federal Reserve and Ben Bernanke, it may be a good time to get in Goldcorp at a decent price before the temporary impact on its two major mines are over, and the price of gold begins to shoot up.

Once that happens, it's unlikely we'll see Goldcorp and some of the other miners at these prices again for some time to come.


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