This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Gold Stocks With the Most Upside Potential

By Jon C. Ogg, 24/7 Wall St.

Whether we are in a good bubble remains a question, but shares of many miners and producers are trading above analysts' price targets, according Thomson Reuters.

To find out which stocks can earn investors money ahead, we looked at more than 40 gold stocks, including Barrick Gold (ABX), Gammon Gold (GRS), Goldcorp (GG), IAMGOLD (IAG), Jaguar Mining (JAG), Royal Gold (RGLD) and Yamana Gold (AUY). Investors who prefer not to take on individual company risk can also look at exchange-traded funds, such as Market Vectors Gold Miners ETF (GDX) and then the Market Vectors Junior Gold Miners ETF (GDXJ). We looked at companies with markets caps of at least $500 million that are actively traded and have five or more analysts covering them.

When it comes to gold stocks, there are many factors to consider when picking companies. Most are foreign or profiting from foreign operations. There are potential labor and safety issues, and political unrest can be a problem as companies generally have to work in many hostile areas. There is also an ongoing currency risk for international operations, though gold is at least generally valued in dollars.
More from 24/7 Wall St
Dueling Opinions Flare on Sirius XM at 52-Week Highs
Costco's Magnificent Recovery
HP To Launch New Handsets Into Jaws of Competive Market

The greatest risk is also the easiest to guess and the hardest to pick: the price of gold today versus a year and two years out. If gold rises to $2,000 per ounce as Jim Rogers suggests, stock-picking skills will matter less when it comes to undervalued or underperforming names. If gold ends up being a huge asset bubble and rapidly falls to $1,000 per ounce, stock picking also won't matter. Rising tides lift all ships, receding tides beach all ships.

Barrick Gold has the biggest by market cap in our universe and it seems odd that the biggest is also trading at a discount when the gold market is still on fire. At $47.32, its 52-week trading range is $33.65 to $48.02. With a $46.6 billion market cap, this Canadian giant is listed as having an average price target of $55.13. The implied upside potential here is about 16%, implying a whopping additional $7.5 billion in market cap.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $110.78 0.36%
FB $94.01 2.11%
GOOG $641.47 2.32%
TSLA $246.15 -0.57%
YHOO $30.85 0.46%


Chart of I:DJI
DOW 16,776.43 +304.06 1.85%
S&P 500 1,987.05 +35.69 1.83%
NASDAQ 4,781.2640 +73.4890 1.56%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs