2-Star Stocks Poised to Plunge: Seabridge Gold?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, gold explorer Seabridge Gold (AMEX: SA  ) has received a distressing two-star ranking.

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

Seabridge facts

Headquarters (Founded) Toronto (1979)
Market Cap $731.7 million
Industry Gold
Trailing-12-Month Operating Income ($16.8 million)
Management President/CEO Rudi Fonk (since 1999)
CFO Christopher Reynolds (since 2011)
Return on Equity (Average, Past 3 Years) 1%
Cash/Debt $41.8 million / $0

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 23% of the 194 All-Star members who have rated Seabridge believe the stock will underperform the S&P 500 going forward.

Just last month, one of those bears, BuffettJunior1, summed up the underperform argument:

Decades from now people will talk about the gold bubble and the money they lost investing in gold. You don't have to be an economics genius to know that panic, no matter the cause, causes gold prices to skyrocket. I've said this a million times and I will [say] it again, gold has no intrinsic value! So investing in something that has no value except what some bigger fool is willing to pay for it is not very smart.

I also want to say one last thing. If our economy really does collapse, I guarantee you gold will be useless. Those who have the most food, water, medicine, etc. will be the ones with all the wealth. I mean if you're starving to death, what would you rather have -- a warm hot meal or a block of gold? I don't know about you guys, but I will take the food.

What do you think about Seabridge, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!

Want to see how well (or not so well) the stocks in this series are performing? Follow the new TrackPoisedTo CAPS account.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying puts in Seabridge Gold. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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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 January 09, 2012, at 3:23 PM, WolfSheppard wrote:

    Want to help some big Wall St. firms cover their shorts at a profit? Then sell this stock. I mean it. If you want to make money go long. With a investment perspective of 3+ years.

    If you sell this stock at this level, whether to go short, or liquidating your position, you are putting money in the pockets of hedge funds that are already short.

    Let me clarify, if you sell, guess who will be buying? The Wall St. firms that are currently short, and have driven the price from 25+ to the current $17.

    If you want to give your money away by taking this article's advice, then atleast give to a worthy cause.

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