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By Malcolm Stacey | Tuesday 18 December 2018
Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Hello, Share Punchers. With fears of Brexit continuing to cancel out the Santa Rally, our thoughts should turn more to that useful hedge against disaster - gold. Now short of buying a few gold bars, which I haven't entirely discounted, by the way, the best way to take advantage of gold is to pick up mining stock. There are a lot of small gold explorers and even producers that I will continue to avoid. But the larger ones might be worth looking into...
My choice is Centamin (CEY). Now I know this company is in Egypt. And you couldn't call that a stable political country right now. But the Egyptians have need of revenues just like everyone else. So even if things worsen in the Land of the Nile, you can probably rely on Centamin to bash on as usual.
Centamin shares have lost a lot of weight this year. That’s partly because the price of gold has not been as high as it deserves. But this company produces a lot of the heavy metal so even a small improvement should galvanise the share price.
The share has been ticking up in recent weeks. And that slow progress will accelerate in my view, not just because of the growing Brexit chaos. But because of Italy’s economic plight, the French riots, Big Donald's fight against domestic slurs and, oh, many more negative reasons.
For those still worried about Egypt’s political position, Centamin also has promising exploration projects in Burkina Faso & Côte d’Ivoire. The company has a strong balance sheet and is driving down production costs, without compromising worker safety. Its big Sukari Mine in Egypt produces half a million ounces of gold per year. You know how much a tiny gold bracelet costs in your high street jewellers, so you can estimate just how valuable that production level is.
And now let’s gets some Xmas drinks in at the Punter’s Return.
TW Note. The three wise men came from the East, Egypt is South, South West of Bethlehem so to answer Malcolm's question the answer is almost certainly NO!
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