Freeport-McMoRan Copper & Gold Inc. (FCX), Barrick Gold Corporation (USA) (ABX), Silver Wheaton Corp. (USA) (SLW): Making Money From Precious Metal Drops

Barrick Gold

Barrick Gold Corporation (USA) (NYSE:ABX) is what you get when you flip Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) upside down. The company mines for both gold and copper but collects a majority of revenue from the former. Almost 87% of the company’s revenues in 2012 came from gold, and that’s worrying considering these turbulent markets.

While sales at this company have been growing year over year for the last decade, total net income has been bouncing around like a yo-yo. Net income in 2012 came out negative, down from $4.48 billion in the prior year.

The turbulent nature of this company and its overexposure to gold are likely the reasons that the stock is off some 34% over the past month. I’m pretty sure that I don’t need to point out how much of a loss that is.

With net income bouncing around the way it does, and the company being overexposed to the price of gold I would have to recommend that potential investors look elsewhere.

Investor Takeaway

If you want into this segment of the market then there is no doubt in my mind that Silver Wheaton Corp. (USA) (NYSE:SLW) is going to be the best place to put your money. The company is not spending money on exploration, one of the biggest expenses that mining companies end up facing to remain prominent. They’ll also continue making money on both metals, even while the market is down, but even more so if prices begin to pick up.

Stay well away from Barrick Gold Corporation (USA) (NYSE:ABX). Obviously it is hard to trust the price of gold currently, and the only way this company will appreciate in value is if the price of gold gives them good enough margins.

The article Making Money From Precious Metal Drops originally appeared on Fool.com and is written by Ash Anderson.

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