Make Kitco Your Homepage

News Bites

Gold stocks have highest cash flow ever, so why are prices down? Michael Gentile

David Lin

Kitco News

(Kitco News) - The gold mining sector is demonstrating excellent fundamentals, representing a complete disconnect between intrinsic value and market value, said Michael Gentile, strategic investor.

"The industry has never been better fundamentally at a time when the least amount of investors ever have interest in the sector," Gentile told David Lin, anchor for Kitco News.

Gentile cited the highest free cash flow the sector has seen in forty years, as well as the highest inflation-adjusted cash flow yield of any equity sector right now as being reasons for the gold stocks' undervaluation.

"The free cash flow yield of the gold sector, if you look at a 40-year chart from the 1970s to today, there's never been a time when the free cash flow yield of the gold sector has been higher," he said.

For Gentile's views on mergers and acquisitions in the gold sector, watch the video above. Follow David Lin on Twitter: @davidlin_TV.

By David Lin

For Kitco News

Contact dlin@kitco.com
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.