Mining stocks look attractively valued, Jeb Handwerger, editor of GoldStockTrades wrote in a note to clients.
Soon the Barrick’s and Newmont’s (NEM) of the world “with increasing profit margins will be faced with a choice to either distribute sizable cash dividends or invest them in mergers and acquisitions,” he observes.
Discovery and production rates in the industry are declining as the bullion prices continue to soar, Handwerger added.
He sees GDX forming a potential bottom as the ETF has held above the $52.50 a share level, a key technical indicator in light of less relative strength in bullion spot markets, Handwerger notes.
GDX closed Tuesday about 5% above that mark.
See the full article from Barron's by clicking here.
