4-Star Stocks Poised to Pop: Northern Dynasty Minerals

Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, gold explorer Northern Dynasty Minerals (AMEX: NAK  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Northern Dynasty's business and see what CAPS investors are saying about the stock right now.

Northern Dynasty facts

Headquarters (founded) Vancouver, Canada (1983)
Market Cap $1.37 billion
Industry Diversified metals and mining
Management

CEO Ronald Thiessen (since 2001)

CFO Marchand Snyman (since 2008)

Return on Equity (average, past 3 years) (11.9%)
Cash/Debt $40.8 million / $0
Competitors

Coeur d'Alene Mines (NYSE: CDE  )

Hecla Mining (NYSE: HL  )

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 93.5% of the 492 members who have rated Northern Dynasty believe the stock will outperform the S&P 500 going forward. These bulls include All-Stars Seering and luvb2b, both of whom are ranked in the top 16% of our community.

In late January , Seering succinctly summed up the Northern Dynasty bull case: "Value of minerals in the ground, priced even conservatively, makes this stock a bargain."

Next year, in fact, Northern Dynasty is expected to cut its bottom-line loss by a whopping 65%. While still losing money, that compares well to growth rates at rivals Coeur d'Alene (0.4%) and Hecla (8.9%), as well as other gold stocks such as Goldcorp (21.9%) and Yamana Gold (NYSE: AUY  ) (6.3%).

CAPS All-Star luvb2b offers a more detailed look into Northern Dynasty:

The estimated gold value alone is nearly $150 billion. Including copper and other metals, the deposit contains nearly $500 billion dollars in metal value. I believe it is the single largest store of mineral wealth in the world. Unlike Bre-X, large mining companies have done close examinations and come away owning substantial stakes: Rio Tinto, Mitsubishi, and Anglo-American. These are major players that Bre-X was never able to get on board, because of course, the deposit was a fraud.

How should one value this deposit? At the current price the market cap is under $2 billion. Bre-X topped out at a market cap around $20 billion -- and it was a complete fraud during a time when commodities weren't booming. ...

All it's going to take in NAK is the right psychological conditions to develop in the market -- at that point history suggests this stock could be shooting star like few others.

What do you think about Northern Dynasty, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


Read/Post Comments (1) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 25, 2011, at 2:33 PM, frankinCA wrote:

    Anyone who follows precious metals is recommending everything so they will be right part of the time. I suggest for prospect buyers, Inmet who will be the copper/gold king in a few years when it's Panamanian approved lease is going to be producing, with full government support! It has proven reserves and inferred reserves that will make anyone who has experience wonder how this hasn't received more publicity. The company has been mining in non precious metals, but has discovered a bonanza in Panama. Maybe Silver Wheaten will buy the gold rights to the copper production gold by-product flow.

    Not a rumor like the one about NAY in Borneo that I believe has not been drilled or assayed. You need some facts, not possibilities when you lay your hard money down. Don't forget to look before you leap, FOOLish friends.

    Take a leap in faith and buy CDE leaps and get your profits as others in the silver boooom!

    I guess the writer wants you to do the homework and profit from those of you, who aren't willing.

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