Recent movements in gold stock prices have thrown up changes in relative attractiveness

John Robertson


Recent movements in gold stock prices have thrown up changes in relative attractiveness. Since Christmas Eve, the All Ordinaries gold price index has risen 15% with a median gain of 22% among the constituent stocks. The range of returns has been +7% to +52%. The PortfolioDirect pricing model suggests the four gold stocks from within its 27 stock coverage that now look the most attractive are: Red Mountain Mining, Blackham Resources, St Barbara and Mutiny Gold. The four stocks in the model looking most expensive are Kula Gold, Ramelius Resources, Phoenix Gold and Medusa Mining. The rankings only measure the extent to which companies may be priced above or below the sector average for the equivalent set of business attributes. No weight is given to company specific events which may be detracting from or contributing to market values in the near term. Mutiny Gold, for example, is subject to a takeover bid which effectively prevents existing shareholders realising value which will accrue to the acquiring company.

John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...


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