I've received quite a few requests lately for some technical analysis of some of our favorite gold and silver miners. Fortunately, today, I finally had some time to actually do the work necessary to write one. Here you go!
Of course, there's a lot more to evaluating the miners than simply Technical Analysis (TA). Production costs, provable reserves and hedging practices are all fundamental measurements for mining companies and anyone willing to invest considerable sums of money into these shares must be willing to do this additional homework. For those of you too bored or too lazy to go to all of this trouble, I present the charts below.
Before we can look at any individual equity, we must first examine the chart of the HUI (the Amex "Gold Bugs" index). If you want to look closer at the index, here's a link from your "friends" at Kitco:
As you can see on the chart below, the HUI has been in a roughly 100-point range for the past 18 months. Though the index is just 15 stocks, it can be useful in ascertaining the general trend of the gold and silver miners. Being aware of this trend will help you to assess the relative strength or weakness of any individual issue. For example, individual equities that are out-performing the HUI should catch your attention while those that are under-performing should, perhaps, be avoided.
So, where do we start? I've got 14, different stocks to show you and the question is, what is a logical way to present them? Let's try this: The stocks can be loosely grouped into three categories:
- Those that are out-performing the paper metal and/or the HUI.
- Those that trade as if they are simply a proxy for paper metal.
- Those that currently stink on ice.
With that in mind, here are the gold and silver miners that currently look the best. They are presented in alphabetical order so as not to show individual preference. (Remember, I present this information as a service. You are the only one who is ultimately responsible for deciding whether or not to buy.) Since these are the best-looking, most attractive gold and silver miner stocks, let's call this group:
First up, here is Yamana Gold Inc. (AUY). Like many of the miners, AUY peaked in 2008 and then fell dramatically. Well, this baby has done nothing but trend higher ever since and sits today just below the 2008, all-time high.
Next up is Coeur d'Alene Mines Corporation (CDE). Below is a weekly chart. Note that CDE fell with paper silver back in May but has since recovered quite well. In fact, it made a higher low back in December when paper silver was double-bottoming. Very interesting.
Below is Endeavour Silver Corporation (EXK). Longtime Turdites will recall that this is my personal favorite. I began buying it several years ago when it was around $4/share and the company announced that they had retired nearly all of their debt. You can tell by this weekly chart that it's still a compelling story.
Lastly, I must show a bit of bias here. Randgold Resources Ltd. (GOLD) looks so terrific that I felt I should give you two charts, the weekly and the monthly, so that you can really appreciate just how well its been doing.
OK, this next set of silver and gold miner stocks merit your consideration, as well. However, they don't belong in the Rachel McAdams group. These stocks are more average. They have tended to simply follow along with the price of paper metal. Because they are not overly hot but simply OK, we'll call them:
First up is Barrick Gold Corporation (ABX). Even though Barrick supposedly covered most of their hedge book a couple of years ago, the price of it's stock is still below the highs of 2008. That said, it has recovered nicely from the lows of 2008 and has hung in there quite well through the late 2011 gold beatdown.
I'm including Eldorado Gold Corporation (EGO) in this group but it could just as easily have fallen in with the under-performers. However, the chart since September looks a lot like the chart of paper gold so I decided to fit it in here.
Below is a chart of Goldcorp Inc. (GG). Yes, it really is Goldcorp and not simply a reprint of ABX. Again, if you are looking for an equity proxy for paper gold, well...here you go:
And finally, speaking of proxies, here is Silver Wheaton (SLW). Without question, the closest thing I could find to an individual stock that trades almost exactly with the metal the company mines/produces. Note that a share of SLW is even priced close to an ounce of silver. In fact, it's so close, I thought I'd accidentally printed a chart of iShares Trust Silver ETF (SLV) instead of SLW!
And, finally, here are your dogs. These charts are so ugly and nasty that I would avoid them until further notice. Let's call this group:
First up is the one-time favorite of chief CNBS clown and loudmouth, Jim Cramer: Agnico-Eagle Mines Limited (AEM). He was all over this baby between 60 and 80. I wonder how he feels about AEM now? Anyway, this one is pretty nasty:
I was somewhat reluctant to put Great Panther Silver Limited (GPL) in this group but I did anyway. It's such a small company that it is subject to rather wild swings in price. If GPL can move back above $3, I'd put it back into the "Sandra Bullock" category. Until then, GPL stays with Rosie.
This next one is just freaking brutal -- Hecla Mining Company (HL). I've seen some mentions of HL lately on the boards so I know that some of you are still holding it. I don't mean to rub salt in the wound but...
NovaGold Resources Inc. (NG) is another stinker that looked like it was going to have a great 2011 and then it just died. If NG can get back above $12, I'll start feeling better about it. Until then, be wary of another drop toward $6.
Like NovaGold, Silvercorp Metals Inc. (SVM) looked poised for a stellar 2011. Instead, rumors and innuendo beat the daylights out of SVM and it is only just now beginning to recover. If it can stay above $8 for a while, it might begin to trend higher. Not sure it's worth the gamble, though.
And, lastly, here's Santa's baby, Tanzanian Royalty Exploration Corporation (TRX). It just got the tar beat out of it in the second half of 2011 as it dropped from $7 all the way down to under $2. Yikes! You're simply placing a bet with Santa if you own this thing (which I do). Frankly, the main reason to own TRX, however, is to secure an invite to the annual shareholders meeting. I haven't had a chance to attend yet but one of these years I will. It always sounds like a lot of fun.
OK, that's it. Those are the main gold and silver miner stocks we've followed here, dating back to the old blogspot days. I invite everyone to include their own analysis in the comments section of this post. Additionally, if there are a few gold and silver miner companies that I didn't mention but about which you'd like to include some information, please feel free to add you own charts.