I’ve been in this business for more than two decades. During that time, I’ve been incredibly bullish, like right after President Trump’s election in 2016, and I’ve been incredibly bearish, like right around the peak of the housing bubble in 2005-’06, asserts Mike Larson, editor of Weiss Ratings' Under the Radar Stocks.
Last month at the Dallas MoneyShow. I said my views were about an “8” on the “Fire and Brimstone” scale, vs. a “10” in the mid-2000s. In other words, while I’m not yet recommending that you “dump it all,” my level of concern about the markets is very high.
I now recommend you get back into one of my favorite gold-mining companies — Gold Resource Corp. (GORO). It has two main areas of operation — western Nevada and Oaxaca in southern Mexico. The benefit of doing business there is clear. They’re much more geopolitically stable locations than where many of its competitors operate.
Unlike most miners, this company pays a dividend. It’s a small one (2 cents per share annualized, good for an indicated yield of around 0.35%). But those dividends have been paid out monthly since commercial production began in 2010. And shareholders can choose to receive their dividends in cash or physical gold and silver (coin-like rounds called “GRC Eagles”).
In the second quarter of 2018, GORO produced just over 5,800 ounces of gold and 593,000 ounces of silver. That was up from 5,700 ounces of gold and 397,000 ounces of silver in the year-ago period.
Moreover, elevated base metals sales and prices increased the credits GORO recorded toward its precious metals production costs. That helped lower its all-in sustaining cost per ounce of gold equivalent sold to just $577, down from $856 a year earlier.
These lower costs are translating into bigger profits. All told, revenue jumped 44% to $30.8 million from $21.4 million in 2017. Profit surged more than fourfold to $3.75 million, or 6 cents a share, from $864,000, or 2 cents a share.
The last time I recommended GORO, it ran up sharply toward almost $7.50. Then it tanked back to the $4s, triggering your stop for a very small loss. Now it’s on the move higher from those levels again.
Before it gets away from you, I recommend you buy GORO at the market. If volatility explodes, and credit risk rears its ugly head again in the markets, the stock should take off like a rocket.
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Check out Mike Larson’s Yield Picks OGS and GTY here.
Recorded: MoneyShow Dallas, Oct. 5, 2018.
Duration: 3:15.
Check out Mike’s Defensive Sector Ideas here.
Recorded: MoneyShow Dallas Oct. 5, 2018.
Duration: 7:24.
