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Monday August 02, 2010
GoldCorp (GG): 'Best in breed'
by Jason Hamlin, editor Gold Stock Bull  Gold has most likely put in its lows for the current correction. We are now well-positioned to profit from the anticipated move and will look to be fully allocated on a move above $1,220. Gold stocks are on sale at the moment and have explosive potential if this year ends as expected. As such, I've made a new addition to our portfolio, Goldcorp (GG), a company that I believe to be best-in-breed among major producers. Goldcorp swung to a profit in its second quarter, posting net earnings of $826.7 million, or $1.11 cents a share, up from a loss of $232.4 million, or 32 cents a share, a year ago. Adjusted earnings were 27 cents a share. 
Revenues rose to $844.3 million, from $628.6 million, in the year-ago period. The company also posted a record-high cash flow of $382.6 million compared to $263.6 million in the second quarter of 2009. For 2010, Goldcorp expects to produce 2.55 million ounces of gold at total cash costs of approximately $350 on a by-product basis. But what is really impressive is that the company is forecasting this solid growth to continue at least until 2014 based on current projects. This represents average annual production growth of 20% until reaching 3.8 million equivalent gold ounces in 2014. Goldcorp is not our typical "undiscovered" miner with the potential to be a "5-bagger" in the next few years, but is expected to show strong consistent growth for at least the next four years. I think Goldcorp will outperform other majors and offer superior leverage to the advance in the gold price and will likely make this a "core holding" going forward. I bought enough shares at $39.05 to represent 10% of our portfolio, with a stop order at $35.50 and a profit objective of $47.25. Learn more about this financial newsletter at Jason Hamlin's Gold Stock Bull. |
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