While sometimes risky, mining stocks can also be strong performers when commodity prices move up. However, due to the volatility of these stocks, Pat McKeough recommends that they only form a modest part of a well-balanced portfolio.
Canadian penny mining stocks are some of the riskiest stocks you can buy. These companies are trying to find mineral deposits that mine at a profit and such a find are exceedingly rare. Because of this, it’s even more important to look for investment quality in penny mines.
For example, we automatically rule out investing in penny mines that promote themselves too aggressively or do so misleadingly. The mine-finding effort is more likely to succeed if the managers focus on finding a mine rather than hyping their stock.
Junior mining stocks are usually smaller companies that typically take on riskier mining projects. However, if a junior mining stock is successful at finding and mining, it can mean huge returns for investors.
No matter what type of mining stocks, or other stocks you invest in, TSI Network recommends following our three-part Successful Investor strategy:
- Invest mainly in well-established, mostly dividend-paying companies;
- Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; and Utilities);
- Downplay or avoid stocks in the broker/media limelight.
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AMERIGO RESOURCES, $4.26, is a buy for aggressive investors. The stock (Toronto symbol ARG; TSINetwork Rating: Speculative) (www.amerigoresources.com; Shares outstanding: 164.5 million; Market cap: $943.6 million; Dividend yield: 4.6%) keeps soaring and is now hitting record highs.
BARRICK MINING, $60.00 is a buy. The miner (Toronto symbol ABX; TSINetwork Rating: Average) (barrick.com; Shares o/s: 1.7 billion; Market cap: $99.6 billion; Yield: 1.6%) will now explore an initial public offering of a new company to house its North American operations. Those include the Nevada Gold Mines venture
ALAMOS GOLD INC., $44.53, is a buy. The gold miner (Toronto symbol AGI; TSINetwork Rating: Average) (www.alamosgold.com; Shares outstanding: 420.4 million; Market cap: $20.0 billion; Dividend yield: 0.3%) last year acquired Argonaut Gold (symbol AR on Toronto) and its troubled Magino mine in northern Ontario in an all-stock deal valued at $325 million U.S. With the purchase, Alamos became Canada’s third-largest gold producer.
We think the direction of silver prices—and for Hecla shares—is still upward. Demand for silver continues to rise, partly as a flight to safety amid a falling U.S. dollar and global political and economic uncertainty. What’s more, worldwide demand remains high for silver used in a range of industrial and manufacturing ways. Those include solar panels, electric vehicles, water purification, medicine and electronics. This long-time pick is a Power Buy.