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(Source: TC2000.com)
While cyclical sectors like the gold miners should never command earnings multiples anywhere near non-cyclical groups in the market given the lack of pricing power they have and the volatility in the commodities they sell. However, even if we assume more reduced earnings multiples of 12-15, most of the sector is now on sale, with many names at dirt-cheap valuations. A few of these names are SSR Mining (SSRM) at ~10x earnings, New Gold (NGD) at less than 7x next year’s earnings estimates, and Agnico Eagle (AEM) which would get interesting if its correction continues. Let’s take a closer look at these names below:
