This alert was sent by Stocks Under $10 on Thursday. Sign up here for a free trial.
With stocks giving back early gains for a second straight session Thursday, we used the weakness to put some cash to work in the model portfolio by adding shares of Yamana Gold (AUY). We also raised our rating on the gold mining stock to a Two from a Three.
We were selling the stock north of $20 last month and we are using this pullback to rebuild our position. At Thursday's closing price of $17.41, the stock is down about 15% from recent highs, even though the underlying spot price of gold is down just 5%. The company remains in position to generate above-average production growth over the next several quarters. In the meantime, we believe that the shares have 4 points of upside potential over the coming months, compared with 2 points to the downside.