By Michael Cintolo, Vice President of Investments and Editor of Cabot Market Letter and Cabot Top Ten Report
For Cabot Wealth Advisory, 1/14/08 Sign up for free Cabot Wealth Advisory e-newsletter
Gold stocks are very strong, due to the price of bullion hitting new all-time peaks (finally eclipsing its climactic early ’80s run-up). A group move is well enough, but what impresses me is the tremendous volume flowing into these stocks. Barrick Gold (ABX), in particular, exploded higher two weeks ago on its heaviest weekly volume ever! And it continued its march higher last week, despite a down market.
“The price of gold is in a solid uptrend, and that’s helping all gold stocks, including Barrick Gold. The company, based in Canada, is one of the largest gold producers in the world, with projects in Nevada, Chile, Tanzania, Alaska, South Africa, Russia and Pakistan, to name a few. While the fundamental numbers in the table below don’t get the heart racing, most gold stocks simply trade up and down with the price of gold, and for good reason—cash costs for mining activities are holding relatively steady, so as spot and futures prices increase, the extra money will fall to the firm’s bottom line. Adding to Barrick’s appeal is its size (institutions want to own big, liquid names in this industry, not small speculative outfits) and a strong management team, which has a history of sound acquisitions and cost containment. All told, we believe Barrick has a bright future as gold heads toward $1,000 an ounce.”
The stock, as I wrote, is powerful, and I don’t expect much of a pullback…although a pause is certainly possible given all the news coverage of rising gold prices. I think you could buy a little here, or on any pullback.
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Vice President of Investments and Editor of Cabot Market Letter and Cabot Top Ten Weekly
A growth stock and market timing expert, Michael Cintolo is editor of Cabot Market Letter and Cabot Top Ten Weekly. Since joining Cabot in 1999, Mike has uncovered exceptional growth stocks and helped to create new tools and rules for buying and selling stocks. Perhaps most notable was his development of the proprietary trend-following market timing system, Cabot Tides that has helped Cabot place among the top handful of market-timing newsletters numerous times.
|Barrick Gold Corporation (ABX)
Brookfield Place TD Canada Trust Tower
161 Bay Street Suite 3700 PO Box 212
Toronto, ON M5J 2S1 Canada
|Index Membership: N/A
Sector: Basic Materials
Full Time Employees: 20,000