Posted On: 12/07/2014 2:11:13 AM
Post# of 9903
2015 Investor's Guide: Don't buy this, buy that—Energy and Mining
by Jen Wieczner , Lauren Silva Laughlin @jenwiecznerDECEMBER 4, 2014, 7:00 AM EST
DON’T BUY METALS
With a bull market in equities heading toward its seventh year, gold is hovering below $1,200 an ounce—down from its 2011 peak of $1,900—and investors say it’s still searching for a bottom. Declining demand in China has also lowered prices for industrial metals like silver and copper.
DO BUY OVERSOLD MINING STOCKS
The falling price of gold has tarnished mining stocks. But bottom-feeding value investors see glimmers amid the gloom. “We continue to like gold-mining stocks because of their extremely low expectations,” says Wasif Latif, who helps oversee $66 billion as head of global multi-assets at USAA. His funds own shares of Goldcorp GG -2.45% , Eldorado Gold EGO -2.21% , and Silver Wheaton SLW 0.05% . “The companies can derive a better return than the commodity itself over time.” Michael Cuggino, who oversees the $7 billion multi-asset Permanent Portfolio Fund, holds industrial metal miners and natural-resource companies such as BHP Billiton BHP -1.68% and Rio Tinto RIO -1.44% , which are trading at P/Es of 12.5 and 9.5, respectively. “They’re the raw materials of economic production,” he says. Cuggino thinks shares of mining company Freeport-McMoRan FCX -1.59% will rise since it “can make free cash off of $3 copper and still pay a dividend.” (The stock is yielding 4.3% and has a 13.9 P/E.) Intrepid’s Travis sees value in Vancouver-based Pan American Silver PAAS -2.18% , which has been losing money recently but maintains a 4.7% dividend yield. “You have to kind of make some assumptions about gold and silver, but I think you’re paid to wait,” Travis says. Jay Bowen, whose firm Bowen Hanes & Co. manages $2.7 billion, has found a way to play the flip side of inexpensive commodities: Leggett & Platt LEG -0.36% , a leading manufacturer of bedsprings and other furniture components, for whom scrap metal and petroleum are major input costs.
http://fortune.com/2014/12/04/2015-investors-...y-markets/
by Jen Wieczner , Lauren Silva Laughlin @jenwiecznerDECEMBER 4, 2014, 7:00 AM EST
DON’T BUY METALS
With a bull market in equities heading toward its seventh year, gold is hovering below $1,200 an ounce—down from its 2011 peak of $1,900—and investors say it’s still searching for a bottom. Declining demand in China has also lowered prices for industrial metals like silver and copper.
DO BUY OVERSOLD MINING STOCKS
The falling price of gold has tarnished mining stocks. But bottom-feeding value investors see glimmers amid the gloom. “We continue to like gold-mining stocks because of their extremely low expectations,” says Wasif Latif, who helps oversee $66 billion as head of global multi-assets at USAA. His funds own shares of Goldcorp GG -2.45% , Eldorado Gold EGO -2.21% , and Silver Wheaton SLW 0.05% . “The companies can derive a better return than the commodity itself over time.” Michael Cuggino, who oversees the $7 billion multi-asset Permanent Portfolio Fund, holds industrial metal miners and natural-resource companies such as BHP Billiton BHP -1.68% and Rio Tinto RIO -1.44% , which are trading at P/Es of 12.5 and 9.5, respectively. “They’re the raw materials of economic production,” he says. Cuggino thinks shares of mining company Freeport-McMoRan FCX -1.59% will rise since it “can make free cash off of $3 copper and still pay a dividend.” (The stock is yielding 4.3% and has a 13.9 P/E.) Intrepid’s Travis sees value in Vancouver-based Pan American Silver PAAS -2.18% , which has been losing money recently but maintains a 4.7% dividend yield. “You have to kind of make some assumptions about gold and silver, but I think you’re paid to wait,” Travis says. Jay Bowen, whose firm Bowen Hanes & Co. manages $2.7 billion, has found a way to play the flip side of inexpensive commodities: Leggett & Platt LEG -0.36% , a leading manufacturer of bedsprings and other furniture components, for whom scrap metal and petroleum are major input costs.
http://fortune.com/2014/12/04/2015-investors-...y-markets/
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