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4-Star Stocks Poised to Pop: Northgate Minerals

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, gold and copper miner Northgate Minerals (AMEX: NXG  ) has earned a respected four-star ranking.

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

Northgate facts

Headquarters (Founded) Toronto, Canada (1919)
Market Cap $954.7 million
Industry Oil and gas drilling
Trailing-12-Month Revenue $482.8 million
Management

CEO Richard Hall (since July 2011)

CFO Jon Douglas (since June 2001)

Return on Equity (Average, Past 3 Years) (7.2%)
Cash/Debt $308.1 million / $153.3 million
Competitors Newmont Mining (NYSE: NEM  )

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

On CAPS, 97% of the 1,709 members who have rated Northgate believe the stock will outperform the S&P 500 going forward. These bulls include All-Stars FAOFool and TSIF, both of whom are ranked in the top 3% of our community.

Just a couple of months ago, FAOFool tapped Northgate as a golden bargain opportunity:

Simple math ... considerable reserves make NXG cheap. This company has proven it knows how to mine gold. Unless gold prices tank completely in the coming years, not expected, NXG will get a proper valuation eventually ... and that means a higher price.

Over the next five years, Northgate is even expected to grow its bottom line at a brisk rate of 37% annually. That's much faster than other gold stocks like Barrick (NYSE: ABX  ) (18%), Newmont (0.5%), and Yamana (NYSE: AUY  ) (8%).

CAPS All-Star TSIF elaborates on the Northgate bull case:

It's been spiking and dropping with "the news" the last two years, trading in a $2.60 to $3.20 range. Many owners of "miner" stock are fairly loyal, but there are enough speculators in the commodities and enough movement with the gold markets that the pops and drops pick up and drop off a lot of trades over time. I'm hopeful that while it will take time for the opportunity to mature that Northgates' purchase of Primero will help pop Northgate out of its lull. Our resident Gold Miner Expert [Christopher Barker] also does, and I respect his analysis and hope his enthusiasm is contagious!

What do you think about Northgate, 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!  

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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.


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 July 25, 2011, at 1:30 PM, dp23peace wrote:

    I have owned Primero and have seen a nice pop since this merger. I have made 25%.

    I'm confused about mergers, so I was wondering if you could help me with a couple of things...

    What do you think will happen to the price of those shares?

    What do you suggest I do now? Hold? Or take a

    profit?

  • Report this Comment On July 29, 2011, at 7:14 PM, easyavenue wrote:

    dp23peace

    Was it a purchase or a merger? The article says "purchase." There is a difference, although I'm not sure how meaningful it is here. It's all about how the companies structure the deal that counts.

    But not to worry. If anything is changing regarding your shares, the company will contact you and tell you what choices you have.

    EA

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Related Tickers

12/31/1969 7:00 PM
NXG $0.00 Down +0.00 +0.00%
Northgate Minerals… CAPS Rating: ****
NEM $48.82 Up +0.19 +0.39%
Newmont Mining Cor… CAPS Rating: ***
AUY $14.88 Up +0.42 +2.90%
Yamana Gold, Inc.… CAPS Rating: ****
ABX $40.00 Up +0.49 +1.24%
Barrick Gold Corp… CAPS Rating: ***

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