Gold Equities: Value or Value Trap?

July 25, 2012 1:08 PM EDT
According to Ron Stewart, a researcher at Dundee mining research, gold equities are cheap. On a price basis, gold equities are below their 5-year norm. 1-year valuation also suggests "compelling" valuation, thinks Steward.

Market Vectors Gold Miners ETF (NYSE: GDX) is lower by 31 percent year-to-date. This compares to the SPDR S&P 500 (NYSE: SPY) which is higher by close to 5 percent.

Stewart favors Goldcorp (NYSE: GG), along with Canadian miners Osisko, Alamos, Dundee, Kirkland Lake.

A number of gold miners are set to report earnings this week, including Barrick Gold Corporation (NYSE: ABX) and Newmont Mining Corp. (NYSE: NEM).

Last week an analyst at TD said Goldcorp production may grow 30 percent by 2014 and Barrick production may fall 3 percent.

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