By Angela Harmantas
Resource stocks have been weak for some time now, but that doesn’t mean that there aren’t companies who have been fiscally responsible during the period. Today on Smallcappower we look at a few companies selling at less than four times free cash flow. Also, we look at the risks to Canada’s housing market and discuss why one Canadian mining company is taking advantage of the precious metals rout – here’s what you need to know today:
Believe it or not, there are mining companies who are weathering this commodity price cycle and freeing up cash flow. Smallcappower selected five companies who are trading at less than 4 times free cash flow, which is a significant metric when it feels like all we’ve seen lately are negative numbers. Most of these companies are gold or gold-weighted miners, so we can’t blame the gold price entirely when it comes to low share prices.
There’s a high risk of a slowdown in the housing markets in Toronto, Regina and Winnipeg, according to a new report released Thursday by the Canadian Mortgage and Housing Corporation. In Toronto’s case, it’s especially interesting given that the city just came off a record July sales period. Meanwhile on the campaign trail, Stephen Harper pledged to raise the RRSP withdrawal limit to $35,000 for first-time homebuyers if elected. We’ll talk about both issues on Smallcappower next week in new insight pieces.
We’ve talked about precious metal streaming companies before on Smallcappower, and yesterday Bloomberg published an article that laid out Silver Wheaton’s plan to chase $700 million in deals amid slumping prices.I’ve spoken before about how I think royalties make sense in this environment, and these companies seem to be the only ones who are benefitting during the slump. But could it be a Faustian bargain? Let us know what you think.
Do you have a burning question you’d like answered by an investment expert or analyst? Let me know and I can post the answer here in the blog. Contact me by email at angela@smallcappower.com or on Twitter: @aharmantas.
