Our Favourite Gold Stock

Article Excerpt

NEWMONT MINING $45 (New York symbol NEM; SI Rating: Average) is the largest gold producer in the world with mines on five continents. North America and Australia account for about 70% of its annual production. It also mines copper and other base metals. The company expects to produce around 7 million ounces of gold this year. Newmont earned $236 million in the three months ended September 30, 2006, up 188.8% from $125 million. (All figures in U.S. funds.) Earnings per share rose 89.3%, to $0.53 from $0.28. Revenues fell slightly to $1.10 billion from $1.15 billion. Newmont’s long-term debt is reasonable at $1.8 billion or 20% of shareholders’ equity, and it has $1.33 billion ($3.16 a share) in cash and equivalents. The stock trades for 14.8 times the $3.05 a share in cash flow that it is likely to report in 2007. Newmont Mining is a buy for aggressive investors who want to hedge against — or bet on — a rise in…

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