Golden Opportunity – Gold Mining Stocks: Barrick Gold Corporation (USA) (ABX), Eldorado Gold Corp (USA) (EGO), Newmont Mining Corp (NEM)

Interest catchers

Barrick Gold Corporation (USA) (NYSE:ABX) is undervalued. With a market cap of $28.9 billion and a P/B of 1.32 (which is below the industry average of 2.25), this stock is a contender. Revenue growth and cash flow from operations is good, even though the earnings-per-share growth is feeble. The most impressive factor was the net operating cash flow, which increased 28.51% at a time when the industry average was -44.49%. 73% better than the industry on net operating cash flow is difficult to ignore.

Eldorado Gold Corp (USA) (NYSE:EGO) is a contender, but the weakest of the group in this Fool’s opinion. Eldorado Gold Corp (USA) (NYSE:EGO) has a market cap of $6.8 billion and runs lower, but very close to, the industry averages on P/E and P/B. (P/E of 21.85 compared to the industry 22.05, and P/B of 1.16 compared to the industry 2.25). Their revenue is up 14.9% over the prior year, which is above the industry average. My hesitation is that the stock performance has been disappointing, the growth in earning per share is feeble and the return on equity is dismal.

Newmont Mining Corp (NYSE:NEM) is another gold mining stock that has my attention. With a market cap of $19.9 billion and a P/E of 10.63, compared to the industry 21.98, this stock is undervalued. The most impressive factor was the increased earnings per share, despite the decline in revenue. This means that they responded to the need to run leaner and smarter sooner than most of the other gold mining companies. When net income increases by 165.5% over the prior year, it’s time to pay attention. This stock is a top contender in my opinion.

The market agreed with me in response to the Cyprus news yesterday. Newmont Mining Corp (NYSE:NEM) and Yamana Gold Inc. (USA) (NYSE:AUY) rose, while Eldorado Gold Corp (USA) (NYSE:EGO) fell and Barrick Gold Corporation (USA) (NYSE:ABX) barely fluctuated. Keep a watchful eye on Newmont, Yamana Gold Inc. (USA) (NYSE:AUY) and Barrick Gold Corporation (USA) (NYSE:ABX).

I admit I have a strong interest and investment in gold. I’m also a strong proponent of going back to the basics, back to the point of origin. Gold mining stocks are currently undervalued and, thus, wise considerations for your portfolio. They certainly are for mine.

The article Golden Opportunity – Gold Mining Stocks originally appeared on Fool.com and is written by Elaine Love.

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