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Look What's Outperforming Gold and Silver

It's almost a risk-free business model that allows these kinds of companies to enter into lucrative purchase agreements without having the cost or dangers associated with mining and producing the precious metals.

So what struck me as both odd and inexplicable was why they both weren't up spectacularly on a day when gold was up over 2% and silver was up over 3%. After hitting a 52-week high of $54.92 on Thursday, FNV was trading down over 1% late into Friday's session.

SLW had a stellar day on Thursday, hitting a high of $35.89 before closing at $35.71. As of my last look Friday, SLW had hit a high for the day of $36.56, up 2.2% over Thursday's close on higher than average volume.

Here comes the big surprise as to which metals companies are outperforming the precious-metals sector.

Are you sitting down? The beleaguered and often disappointing king of copper production and the giant of the industrial metal world are almost as hot as molten iron.

None other than Freeport-McMoRan Copper & Gold (FCX - Get Report) and Vale S.A. (VALE - Get Report) are rocking and rolling in the free world.

It's about time!

FCX was up over 9% Friday, partly in sympathy with steel and metallurgical coal companies including Alpha Natural Resource (ANR), the largest U.S. supplier of metallurgical coal for making steel, which rallied almost 17% as the No. 1 performer in the S&P 500 Index.

Another big climber Friday was Cliff Natural Resources (CLF), which mines and produces iron ore pellets as well as metallurgical coal. It's been trading at a PE ratio of 4 and forward PE of slightly above 5, so it shouldn't surprise us to see the 15% plus move Friday based on hopes for a major monetary stimulus announcement from the Fed next week.

Friday's weak employment report is encouraging lots of speculation about additional quantitative easing by the Federal Reserve, so these undervalued companies that are selling at very low price-to-earnings to growth (PEG) ratios are overdue for a powerful rebound.
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GDX $24.28 4.46%
FCX $12.66 0.08%
FNV $68.61 3.20%
PAAS $14.97 4.70%
SLW $19.87 5.47%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

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