Is This Gold Stock Worth the Risk?
Investors looking for a high-risk, high-reward play on gold should consider Randgold Resources, Cramer said Monday.
The African miner has some of the most spectacular production growth in the industry, the “Mad Money” host said. Over the last ten years, its production has grown by 2,400 percent. Its market capitalization rose from roughly $150 million to over $7 billion over the same time period. Cramer said its growth is far from over, as the company plans to increase production by about 70 percent in 2011.
While Randgold's stock has dramatically outperformed the SPDR Gold Shares exchange-traded fund over the past decade, Cramer noted GOLD has fell by 3.7 percent in the past 12 months. The company has run into high expenses to get the precious metal out of the ground, Cramer explained. What’s more, Randgold reported a disappointing quarter last week. It posted a 24 cent earnings miss off a 69 cent basis thanks to the political unrest that hit its Ivory Coast mine.
Cramer thinks there are also tremendous opportunities in GOLD, though. Randgold already has two operating mines and expects five additional mines will come on line in the next three years. The new mines would increase its annual production to about 1.2 million ounces by 2014, Cramer said. The company is also eyeing 250 more targets throughout Africa for potential future mines.
So is GOLD worth the risk? To learn more, Cramer spoke with CEO Mark Bristow. Check out the video to see the full interview.
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