Agnico-Eagle: The Gold Standard
If Cramer is right – and gold goes to $1600 – then he thinks Agnico-Eagle Mines , the rapidly growing Canadian gold miner, is going to be one of the surest ways to profit.
Gold is one of the few themes that is still working as the economy slows, thanks in large part to the soaring commodity costs that are also accounting for the rise of the ag complex. These areas are the closest thing to certainty right now, as far as Cramer is concerned, because they don’t have much earnings risk. Why invest in companies that said they could beat their numbers but now might have to backtrack since the market is taking such a beating? Gold has been working for a long time and there’s no reason to think its run will stop anytime soon.
AEM is a special case because it is completely un-hedged, meaning the company has no insurance against gold prices dropping. That would be pretty bad news if a decline in gold looked imminent, but Cramer is willing to take a risk and bet that won’t happen.
And AEM even comes with a side of uranium. The company bought a stake in Forum Uranium as uranium pulled back from those ridiculous highs of a few months ago. But the market for uranium, especially in the form of demand for nuclear power plants, is growing and uranium prices also look pretty likely to continue higher. That should be an added plus for AEM.
Read Cramer’s interview with AEM boss Sean Boyd from Friday’s show to find out more about why this stock is a buy.
Jim's charitable trust owns Yamana Gold.
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