Finally, it’s a simple case of valuation. NPS has projected peak sales of $350 million according to my Fool colleague Dan Carroll. However, it’s estimated that 10,000 to 15,000 people in the U.S. suffer from short bowel syndrome. For NPS to hit its peak sales target, it’d only need to treat about 1,200 people annually. This seems like a pretty lowball figure, which makes NPS seem incredibly undervalued here.
Yamana Gold Inc. (USA) (NYSE:AUY)
When I dug deeply into the gold mining sector in early January, I was able to conclude statistically that Yamana Gold is the cream of the crop when it comes to gold miners. Apparently Wall Street didn’t get that message, because shares of Yamana and spot gold in general have been trickling lower. If I were you, I’d suggest polishing your stock-sniffing skills and digging deeper into Yamana at these levels.
Of the 12 miners that I examined in January, only two had noticeable by-product production capable of meaningfully reducing their cash costs: Yamana, which boasted the lowest cash cost of all, and Goldcorp Inc. (USA) (NYSE:GG), which has also made a living from using metallic by-products to reduce its cash costs. Both also shared a somewhat unique quality, given the rising cost nature of mine development and maintenance, of boosting production in their most recent quarter. Goldcorp’s saving grace is its Penasquito mine in Mexico, which is projected to produce 360,000 to 400,000 ounces of gold in 2013, more than double what it produced in 2010.
For Yamana, its El Penon mine in Chile is its heavy hitter, with production expectations of 450,000 to 500,000 ounces per year. Just last week, Yamana also indicated that reserves at Cerro Moro jumped 44% to 1.95 million ounces over its previous estimates. Furthermore, the measured ore grades at Cerro Moro of 14.6 g/t is phenomenally high.
As long as spot gold prices remain flat — and personally I don’t see how they wouldn’t rise given the cauldron of uncertainty we’re facing globally — Yamana will continue to produce among the best gold margin in the industry. If China’s economy can get completely back on track, the sky’s the limit for Yamana.
Foolish roundup
Is my bullishness or bearishness misplaced? Share your thoughts in the comments section below, and consider following my cue by using these links to add these companies to your free personalized Watchlist to keep up on the latest news with each company:
- Add Angie’s List to My Watchlist.
- Add NPS Pharmaceuticals to My Watchlist.
- Add Yamana Gold to My Watchlist.
The article 3 Stocks to Get on Your Watchlist originally appeared on Fool.com and is written by Sean Williams.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. He’s a total nerd when it comes to making lists. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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