Gold's recent stumble has brought gold miner stocks down in synch, with the Market Vectors Gold Miners exchange-traded fund dropping last month to the lowest level since it began trading in May 2006.
Market declines represent buying opportunities for value investors, of course, and MarketWatch columnist Jeff Reeves
cites two stocks that he thinks are worth a look: Royal Gold and Gold Fields.
Royal Gold is "at the top of my list of miners to watch," he writes. The stock has soared 47 percent so far this year. The company "is soundly profitable and pays a modest 1.3 percent dividend that is sustainable at less than 65 percent of projected fiscal 2015 earnings," Reeves notes.
And why is the company "soundly profitable?" you might ask.
"The reason is a unique business model," Reeves says. "Royal Gold is not actually a miner, but rather 'streams' gold from partners that do the mining."
As for Gold Fields, its shares have risen 20 percent so far this year. "Gold Fields has a much more attractive balance sheet than many of its peers," he writes.
"For the long-term investor looking for diversification, there may still be a role for gold miners in his portfolio."
Christine Benz, director of personal finance for Morningstar, also sees opportunity in gold miner stocks, though she counsels caution.
"The sector is notoriously volatile, and investors have historically done a poor job of timing their purchases and sales," Benz writes on Morningstar.com
. "But investors who are willing to look beyond the sector's ugly near-term numbers are apt to find this is a much more attractive entry point than 2009 and 2010."
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