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Look What's Outperforming Gold and Silver

Speaking of low PE and PEG ratios, VALE had a nice day as well, up 7% -- matching its current 7% dividend yield. Incidentally, CLF also pays a 7.2% yield, which is a payout ratio of only 15%. VALE's payout ratio is a more uncomfortable but sustainable 52%. The following price comparison chart highlights the past four-year movements of VALE, FCX and CLF.

The big picture here is that this rally may have just begun!

VALE Chart VALE data by YCharts

Bottom line: The hope for major financial stimuli in the industrial sector of the world's economy is causing a massive shift toward revaluing these up-to-now disregarded companies.

If the Federal Reserve goes "all out" along with the European Central Bank and the Bank of China to light a big fire under the world's economic recovery prospects, well, we might just be in the early innings of a massive move higher in these stocks.

Also keep an eye on the gold and silver producers, or the sector as represented by the Market Vectors Gold Miners ETF (GDX). In the silver-producing sector I like the second-largest silver miner in the world, Pan American Silver (PAAS - Get Report), a well-managed company that produces over $2.5 billion in silver and looks quite inexpensive in light of silver's current move skyward.

Once the "smart money" and the big funds begin to take the rally in gold and silver prices seriously (think of the song "Our Love is Here to Stay") then the entire small-investor camp will jump on the shining wagon. That's when we'll see the same type of monster-rally in the precious metals sector that we're beginning to see in the industrial metals sector.

Those of us that were early to the party are now seeing a swift and (hopefully) sustainable rally with the industrial metals producers.

How long we have waited and the moment seems to finally have arrived. I'm hearing the late, great Etta James singing "At Last"!

As of the time of publication the author had positions in FNV, SLW, FCX, VALE, GDX and PAAS.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Jim Cramer and Stephanie Link actively manage a real money portfolio for his charitable trust- enjoy advance notice of every trade, full access to the portfolio, and deep coverage of the latest economic events and market movements.

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SYM TRADE IT LAST %CHG
FNV $49.17 0.00%
GDX $19.72 0.00%
FCX $20.67 0.00%
PAAS $9.29 0.00%
SLW $19.46 0.00%

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