"I believe gold will be one of the best-performing sectors over the next year," predicts Andrew Addison, the Addison Report. "While I do not expect the price of gold itself to rise much, certain companies will be able to increase profits sharply.
"RTZ [NYSE, RTZ, $43.125], based in London, is the world's largest mining company. It is also one of the best-managed mining firms in the world.
"During the past 10 years, earnings have compounded at a 10 percent annual rate, while dividends have risen at a 13 percent rate. The stock is a buy below $44 a share, for a target price of $54."
Charles LaLoggia, Special Situation Report, and Andrew Addison, the Addison Report, recommend Pegasus Gold (AMEX, PGU, $16).
Says Mr. LaLoggia: "The probability that the postelection economy will feature rising inflation, rising interest rates and a soaring federal budget deficit should be extremely bullish for gold and gold stocks. . . . One favorite in this area is Pegasus Gold, which has been one of only a handful of gold mining firms able to produce rising sales and earnings in recent years."
Says Mr. Addison: "Technically, the stock appears to be in the late stages of a base-building period and now shows very bullish relative strength."
Gordon Speir, Fahnestock & Co., recommends Newmont Mining (NYSE, NEM, $51), a North American gold miner.
"Over the past four years, the firm has been completely restructured to focus solely on gold mining. Total proven and probable reserves of over 20 million ounces of gold represent more than 10 years of production. Further, the company recently became the first North American gold operator to enter into an agreement with a republic of the former Soviet Union. We feel the stock deserves the highest weighting in a portfolio of gold shares. We believe this stock may be the best-performing gold issue over the next two years."
"Gold continues to come under attack, as everyone believes inflation is no longer a threat. On the contrary, we believe that this feeling is misguided and that gold and gold-mining stocks are poised to rally," says Bernie Schaeffer, Fund Profit Alert.
"Look for inflation fears to grow as the Fed's easy-money policy drives the economy forward. We continue to hold four gold-related funds in our recommended portfolio" -- Benham Gold (no load, 800-321-8321), Fidelity Select American Gold (3 percent load, 800-544-8888), Financial Strategic Gold (no load, 800-525-8085) and Vanguard Specialized Gold (no load, 800-662-7447).