Historically, tumultuous times offer some of the best opportunities to buy stocks, and the market's current mess surely qualifies. The brutal conditions have sent many investors looking to safer havens, including defensive positions in gold and precious metals. And with little good news on the economic horizon, it's no surprise some investors still see many reasons to consider buying shares of gold miner Newmont Mining (NYSE: NEM) today.
In our Motley Fool CAPS community, 922 investors have given a bullish or bearish opinion on Newmont Mining. Poring through the detailed information packed in pitches and other comments, I've dug up three of the top reasons why many members consider the stock a buy today:
1. Boddington Mine: Newmont recently finalized the acquisition of the remaining one-third interest of the Boddington project from AngloGold Ashanti (NYSE: AU), giving it 100% ownership of the largest gold project in Australia that's expected to start production in mid-2009. Just as Kinross Gold (NYSE: KGC) is pumping up production through acquisition, Boddington is expected add significantly to Newmont's numbers and produce 1 million low-cost ounces of gold per year.
2. Higher expected sales: Despite lower revenue in the first quarter, Newmont's earnings, excluding one-time items, beat Wall Street expectations and the gold titan maintained its 2009 outlook of 5.2 million ounces to 5.5 million ounces of gold. Like Yamana Gold (NYSE: AUY) and Goldcorp (NYSE: GG), Newmont expects increases in production and the company's CEO forecasts higher gold sales in the second half of the year.
3. Long-term price appreciation: Many CAPS members believe the fundamental economics of the U.S. government's response to the depression (that is, printing lots of paperbacks) is reason enough to hold gold and gold producers as a safe haven investment and a hedge against inflation. Some see holding producers like Newmont, Agnico-Eagle Mines (NYSE: AEM), and Barrick Gold (NYSE: ABX) as a good way to gain leverage to potential long-term appreciation.
Of course, there's a lot more devil in the details of these buy-side opinions, which is why CAPS is such a great resource to check and balance your own analysis. You can read the bullish and bearish sides to every stock. To see what the very best CAPS members are saying now about Newmont Mining, just click on over to Motley Fool CAPS and have a look -- it's all free, and your opinion's welcome, too.
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