Diamond Stocks
Diamond stocks, or the shares of companies that engage in diamond exploration, are high-risk investments.
They can pay huge dividends, because finding diamonds in mineable quantities can be very profitable. For example, Canada's Ekati diamond mine in the Lac de Gras area of the Northwest Territories is generating revenues of approximately $500 million per year over its 25-year mine life.
But investing in diamond stocks is speculative because it involves locating promising properties and bringing them into production. Generally, there is a long period between the exploration phase and the commercial production phase, before any investment will begin to pay off.
WESTJET AIRLINES $15.45 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1-877-493-7853; www.westjet.com; Shares outstanding: 139.8 million; Market cap: $2.2 billion; Dividend yield: 1.3%) has just signed an “interline” agreement with Delta Air Lines. Under these agreements, two airlines cooperate on flights and baggage handling. WestJet has similar arrangements with Air France-KLM, China Airways of Taiwan, Hong Kong-based Dragonair and American …read more »
Here are two of the most promising early stage diamond stocks. Both have speculative appeal, but they are buys only for highly aggressive investors.
STORNOWAY DIAMOND CORP. $0.22 (Toronto symbol SWY; SI Rating: Start-up) (1-888-338-2200; www.sornowaydiamonds.com; Shares outstanding: 227.2 million; Market cap: $50.0 million) holds interests in over 14 diamond exploration properties in Canada and one in Botswana. TSE-listed Agnico-Eagle holds …read more »
