NEW YORK (TheStreet) -- The uncertainty regarding whether or not the U.S. economy will fall off the fiscal cliff should be giving Comex gold a bid, but instead, the precious metal has been moving sideways to down since trading as high as $1,798.1 on Oct. 5 and as low as $1,672.5 on Nov. 5. This price action still has gold above its 200-day simple moving average at $1663.4.
When prospecting for gold mining stocks using www.ValuEngine.com I found seven that have "four-engine" buy ratings. All seven are undervalued by 18.4% to 45.2%. One has a gain of 41.1% over the last 12 months, while the other six are lower by 16.0% to 28.8%. By comparison Comex gold is up 6.9% over the last 12 months. Three of seven gold miners have single-digit 12 month trailing price-to-earnings ratios, three have reasonable P/E, while one has an elevated P/E.
Fundamentally ValuEngine shows the basic industries sector just 3.2% undervalued with the gold mining industry 10.5% undervalued, which is a reason to consider gold shares over Comex gold. The last time I made this type of comparison was on Sept. 10 when I wrote Gold Stocks Continue to Lag Gold.
With the gold mining industry undervalued and with most gold mining shares lagging gold significantly, investors considering buying gold should prospect among the gold miners I profiled today.
Reading the TableOV/UN Valued: The stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine. VE Rating: A "1-engine" rating is a strong sell, a "2-engine" rating is a sell, a "3-engine" rating is a hold, a "4-engine" rating is a buy and a "5-engine" rating is a strong buy. Last 12-Month Return (%): Stocks with a red number declined by that percentage over the last 12 months. Stocks with a black number increased by that percentage. Forecast 1-Year Return: Stocks with a red number are projected to decline by that percentage over the next 12 months. Stocks with a black number in the table are projected to move higher by that percentage over the next 12 months.
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