Research Report ►(comments)

Agnico-Eagle Mines Limited is a gold producer with mining operations around the world.

Investment Impacts (help)

Canada Country Analysis ► (edit / improve) Canada (CAD) has a capitalist, service-based, economy and is one of the wealthiest countries in the world. The services and materials industry are the two main employers. Currency: the Canadian dollar has the potential to decrease in value especially if export markets for materials do not perform well. Investor Survey: the economic environment is very favorable for long term economic growth due to high scores on economic freedom and SWOT strengths. Trade: China, UK, Japan, Mexico and the US are Canada’s top trading partners, while the leading exports are energy and materials. Commodity: Canada has the capacity to produce a significant amount of crude oil. Other commodities include Uranium, lumber, zinc, and nickel. SWOT Analysis: The Leading Canadian strengths include Canada’s free trade policy, oil reserves, and universal health system. Trading Strategy: An overvalued currency and low investment flow potential are negatives, while the favorable business environment is a significant positive. Canada’s potential is neutral.

Gold Commodity Analysis ► (edit / improve) Gold is a widely used metal in the jewelry industry. Commodity: Gold is rated a Hold, because gold demanders and suppliers have a low potential to increase in value. Investor Survey: Gold’s long term growth potential is moderately favorable due to high scores on difficulty to expand in the short term and many SWOT analysis strengths. SWOT Analysis: Strength: Gold has a large, diverse growth market; Weakness: If the cost of gold is too high, then consumers might substitute other metals for gold. Opportunity to grow: gold acts as an inflation hedge investment. Threat: volatile prices may decrease the popularity of gold. Trading Strategy: commodity analyses hold rating indicates that gold should stay the same price over the short term. A moderately favorable investor survey means gold may increase in price over the long term.

Materials Industry Analysis ► (edit / improve)

Description: The materials industry includes companies whose sales originate from the mining, acquisition and sale of physical substances for manufacturing-related purposes. Read More.

Profit Analysis: The best way to profit from material stock is to find the most undervalued investments (Wall Street and Main Street buy ratings) during economic recessions. Those investments should be undervalued (see Wall Street on left side), and have high Main Street Common Sense investment ratings (see Main Street on right side). When an economic recovery occurs, material stocks tend to outperform the general stock market, because consumers and businesses must increase their inventories quickly to meet demand for manufactured goods. Consumers and business delayed purchases on items they wanted, but resisted buying during tougher economic times. Eventually, material company investments become overvalued, because profits and stock prices increase past their fair values. During the last stages of an economic business cycle, just before a recession, it is best to sell material stocks, because they are likely to decrease in price the fastest. Expensive (overvalued) stocks with low Main Street Common Sense ratings should be sold at any time to invest in better stocks. Two buys ratings are the best and two sell ratings are the worst possible stock investments.

Inflation Hedge: Changes in commodity prices affect material stocks. When commodity prices are high due to increased demand or lower supply, material stocks increase, because demand for their goods also increases. Inflation occurs when the price of goods and services increases. The price of materials are generally the first inputs into the production of goods, so changes in material prices directly affect the cost of products, which is measured by inflation. Therefore, a good hedge against inflation is to own material stock investments. When inflation increases, so do the profits of material companies, which may have directly contributed to the increase in prices.

Trading Strategy: During economic recessions, consumers tend to cut back on spending to save money. Businesses tend to cut back on investments. Industrial companies make the products bought by consumers and businesses, but to make those products, industrial companies must obtain materials. Less spending on goods decreases material business revenue and eventually decreases stock prices. During economic recoveries, consumers and businesses spend quickly to replace or catch up with quickly increasing demand. Material companies quickly receive orders from industrial companies who need to manufacture new products to meet quickly increasing demand. Higher spending increases material business revenue and eventually increases stock prices. During a longer economic expansion, consumer and business demand increases for material companies, but at a slower pace than during the recovery stage.

¹ WikiWealth only uses the largest 30 companies in each industry for the basis of these financial measures. Each statistic is the market weighted average of the 30 companies.

² Investment potential (margin of safety) is a weighted average of the discounted cash flow (DCF), the enterprise value (EV) market multiple, and the Warren Buffett investment methods.

SWOT Analysis - Agnico-Eagle Mines ► Add Your Input Below

WACC Discount Rate Analysis - Agnico-Eagle Mines ► Experiment with AEM's Analysis ►

Discounted Cash Flow Analysis - Agnico-Eagle Mines ► Experiment with AEM's Analysis ►

Comparative Value Multiple Analysis - Agnico-Eagle Mines ► Experiment with AEM's Analysis ►

Warren Buffett Intrinsic Value Analysis - Agnico-Eagle Mines ► Experiment with AEM's Analysis ►

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