7 Tiny Stocks
Ripe for Takeover
Our Recent Wins Prove:
A Takeover Bid on
Any One of These Gold Juniors
Can Net You 38%, 40%,
Even 46% Gains in a Single Day
This Research Report is Yours Free with a three-month, zero-risk trial subscription to Casey International Speculator...
If you want a shot of adrenaline, watch one of your stocks get a premium-priced takeover bid that sends the price soaring 40% or more in a single day. Then, select the prime takeover targets throughout the market – and watch it happen again and again. Even better, what if you could find stocks where this one-day jump is just the "icing on the cake" after gains of 60% or more?
Hard to believe? Sure. That is, until you see the proof with your own eyes, over and over again, as our readers have. Like when AuEx Ventures got a takeover bid from Fronteer Gold and shares jumped 38% higher in a day. Or when Fronteer got picked up just a few months later by mining giant Newmont, and stock prices soared 40% the morning of the announcement. Antares Minerals' story is even more impressive – its stock jumped 46% in a day on a takeover bid, letting readers cash out with 150% gains.
The next question is always, "How can I get in on the next one?" And your answer to that is explained below.
Dear Friend and Fellow Investor,
On May 3, 2010, Casey International Speculator readers received a "buy" recommendation on Antares Minerals, a junior resource explorer developing a huge copper deposit at their Haquira copper-gold project in Peru.
Editor and Casey Research Chief Metals & Mining Investment Strategist Louis James called Antares a particularly juicy candidate for a takeover by their next-door neighbor Xstrata – a call that would prove mostly correct in six months, handing readers a quick 150% gain.
Mostly correct? Well, Louis did get one thing wrong about his prediction – as I explain below. But it turned out to be the most inconsequential aspect of the whole deal...
You see, prior to the recommendation Antares had announced what Louis described as a "world-class deposit" at Haquira.
They were continuing to drill, with more good news coming in all the time. And as Antares' good news came rolling in, its next-door neighbor on the project – Xstrata – had some bad news.
Xstrata was sent scrambling. The team had asked Peru's government for an extended timeline to complete a feasibility study on their property next to Antares'. But the government said, "No" – Antares would have to finish the feasibility study on its original timeline.
Louis' best guess was that Peru's President Garcia wanted a major new project announced while he was still in office. Garcia likely saw Xstrata as his best bet for that announcement – so politically he couldn't afford to be flexible.
This left Xstrata with a serious decision to make – how would it make its own project profitable enough to move forward? Louis speculated that Xstrata may buy out Antares to get enough "economy of scale" to make its own project make sense.
As Louis said, "That's a total spec, but a pretty juicy one."
Louis' Prediction Pays Off Big
Louis was proven correct within months on almost every aspect of the Antares deal.
- First, Louis was correct that Antares shares were undervalued at current market prices – particularly in light of recent developments at Haquira and elsewhere.
- Beyond that, he was correct that Antares' share price was bound to go up with or without a takeover bid as news about its developing projects continued to break.
- Moreover, he was right on target with his prediction that Antares would soon be bought out (and at a premium, too).
The only thing Louis was wrong on was the most inconsequential aspect of the whole recommendation – who would buy Antares.
So what happened?
Well, Louis' original recommendation in May 2010 was to pick up shares of Antares at C$2.78 apiece. Good timing. Market strength and further developments on Antares' projects pushed shares up over 60% from the original recommendation price by October.
At this point, Louis and his team called Antares one of two stocks with the "most imminent takeover potential."
Then... in less than one month and before the November issue of International Speculator hit... there was an announcement that Antares would indeed be taken over – although it was a surprise bid from First Quantum Minerals, instead of Antares' Peruvian neighbor Xstrata.
This takeover bid handed International Speculator readers who'd gotten in on the original recommendation a solid 150% gain in six months... including a 46% jump on the day the takeover was announced.
As you can imagine, Louis didn't catch much grief for getting the "who" wrong, when getting everything else right added up to numbers like that.
Then in December, Antares shares were converted into First Quantum shares at full market value – up another 34% since the day the takeover was announced.
And to top it off, shareholders were given additional free shares of Regulus Resources, a spinoff company created to further develop Antares' copper-gold-silver Rio Grande project in Argentina. This one looks like it could turn into another winner for readers as the project develops.
All-in, the gains from this play were 202% in less than eight months from recommendation to the completion of the takeover deal – and those gains go up to 245% after adding in the value of the spinoff Regulus shares on their first day trading.
But This Story Is Only the Beginning...
You see – big gold and resource companies are on the hunt right now. As gold, silver, and other resource prices keep going up, they're looking for quick ways to increase their capacity and profits.
Yet in most cases they're already near maximum output from their current mines. So their next best way to get a quick boost is to buy out and take over junior exploration companies with metal in the ground that can be developed quickly – just like what happened with Antares.
This can lead to big paydays for you.
Take Fronteer Gold – another big takeover win from the Casey International Speculator portfolio.
First dollar invested up over 1,000%”
“I have been a subscriber to Mr. Casey's International Speculator for over 10 years, but have only actively followed his advice for the last seven years. Over the last seven years my investments have risen by an average 42.9% per year; 26.1% in 2007. The first dollar I invested is up over 1,000%!! Keep up the great work.”
- Jim G.
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Fifteen International Speculator-recommended investments ... up an average of 66%”
“…my fifteen International Speculator-recommended investments, which I continue to hold, are up an average of 66%, including three more-than-doubles in gold, silver, and copper. I will not be leaving International Speculator. There is too much to look forward to, too much to learn from you, and too much money to be made.”
- Duane S.
Fronteer gold had been in the portfolio since 2006 (originally handing readers 198% gains in 12 months before a "take profits" recommendation), though it had been mostly on hold through 2008 due to a political setback on a uranium project in Labrador.
Toward the end of 2008 though, Fronteer was starting to scream "opportunity." Louis noted in October 2008 that Fronteer was "deeply undervalued" thanks to the combined effect of the market crashing and its political setback on the uranium project.
So in January 2009 he issued another buy recommendation on Fronteer, calling it...
"Too good a deal to pass up"
The recommendation in the January 2009 issue was to buy Fronteer at C$2.25 – a price that was hit quickly, giving readers a great entry point.
Louis felt so strongly about this pick that he kept urging readers to buy:
- In March 2009, Fronteer was labeled a "best buy" at C$2.89.
- In April, he advised readers to put in an order at C$2.50 to buy on dips – and again his "buy under" price was hit.
- In June 2009 as the price of Fronteer started to take off, readers were reassured that there was "a lot of upside."
With Fronteer hitting C$4.64 in September 2009, readers who got in at the original recommendation were told to protect their initial investment and take profits on their nine-month, 95% gains... leaving their gains invested to ride the upside risk-free.
Even as he issued the "take profits" recommendation, Louis saw more upside and urged readers who had not yet gotten in to do so.
In another 12 months – by September 2010 – Fronteer had almost doubled again, as in one month it announced impressive gold assay results, plus put out a takeover bid on joint-venture (JV) partner AuEx Ventures.
Then in October, Louis flexed his prediction muscles one more time. He told readers that Fronteer's takeover deal for AuEx made Fronteer "a much better takeover target." With Fronteer gaining 100% ownership on a rich project that had previously been joint ventured, it was much more likely to be snapped up.
Louis and his team were proven right again on their takeover prediction, as in early February 2011 (just four months after their "takeover" call) Fronteer entered a takeover agreement with mining giant Newmont. The takeover pushed Fronteer shares up over C$14.00, including a 40% jump on the day the takeover was announced.
The day the takeover was completed, Fronteer shareholders were given C$14.00 cash plus 1/4 of a share in the spinoff company (called Pilot Gold) for every Fronteer share they owned.
All told, readers who got in on the C$2.25 recommendation in January 2009 closed out the takeover transaction with a solid six-bagger (522% gains) plus a free stake in the new company taking over at a handful of Fronteer's exploration properties.
And even if you'd gotten in on the original recommendation in 2006, taken your original money off the table when the take profits recommendation was issued, and simply kept the "house money" in the game through the takeover, you'd be sitting on a quite respectable 198% gains plus your stake in Pilot Gold.
And It Happens Over and Over...
Again... I'd mentioned AuEx Ventures' takeover by Fronteer above, but what I didn't tell you was that AuEx was also an International Speculator pick at the time.
Readers holding AuEx at the time saw their shares jump 38% the day the takeover was announced. Yet for many this was just the icing on the cake – readers who'd gotten in at the original recommendation were sitting on 226% total gains by the time their AuEx shares were converted to Fronteer shares in the takeover deal.
And because the AuEx shares were converted into Fronteer shares, readers who held on were also able to take advantage of the big bump in Fronteer's share price as it was acquired by Newmont. Win and win!
And Again... Yet another example of a big win on a takeover was Red Back Mining. Red Back was recommended to International Speculator readers back in October 2009; and after Kinross Gold took a 9.4% stake in Red Back in June 2010, Louis suggested, "Support like this could easily be seen to imply Kinross has bigger plans."
He was right – less than three months later Red Back was taken over by Kinross, with readers booking 133% gains in under a year, including a one-day bump of almost 8% when the takeover was announced.
Made twofold, fourfold, and sixfold respectively”
"Just a quick note to pass on my gratitude to the folks at Casey Research. I had bought & recently sold shares of Brett Resources, Exeter Resource, and Romarco Minerals, and made twofold, fourfold, and sixfold respectively. It took some patience, as well as nerves of steel during the liquidation period of 2008, but as you know better than most... that's what it takes to make money after the folks at Casey Research do the homework in the field for us. Thanks again!”
- Mark F.
And Again... Brett Resources was originally recommended at C$1.20 in November 2007, but got beat up quite a bit by market weakness through 2008 and into 2009. Louis liked what he saw with Brett and presented the weakness as a buying opportunity. He recommended Brett as a "buy if you dare" at C$0.58 in May 2009, noting the market's sour treatment of the stock.
It took longer than expected, but by January 2010 the market recognized Brett's value, and the stock was taking off. As it hit a near-record high C$1.67 a share, Louis called Brett's Hammond Reef project "an increasingly attractive takeover project." Again this was a spot-on assessment, as just over two months later Osisko Mining announced a takeover bid for Brett that bumped shares up by 35% in a day, and continued to send Brett's share price upward until readers were urged to cash out at C$3.52 a share.
For readers who bought Brett at the original recommendation, this was a 113% gain over their entry price. Of course, you could have done better – if you "dared" and jumped in on the "buy if you dare" recommendation when the market wasn't favoring Brett, you could have cashed out with as much as 341% gains. Many readers likely fell somewhere in between.
So readers made:
- 150% on Antares, including the 46% one-day "takeover bump"
- 198% to 522% on Fronteer, including the 40% takeover bump
- 226% on AuEx, including the 38% takeover bump
- 133% on Red Back, including the 8% takeover bump
- 113% to 341% on Brett, including the 35% takeover bump
And these are all just recent examples from the International Speculator portfolio.
But these five stories are just the beginning.
More Opportunities than Ever to Profit from Mining Industry Takeovers
Mergers and acquisitions (M&A) within the mining industry as a whole have been on a tear, according to a recent report from business-consulting powerhouse PricewaterhouseCoopers (PwC).
Here are a couple highlights, with our thoughts on why the trends revealed represent huge opportunities in the types of junior resource stocks covered in Casey International Speculator:
- "Number of transactions at all time high. Aggregate dollar values post impressive annual gains, but 'mega deals' remain elusive." Last year broke the record for global mining M&A deals, and according to the PwC report, "No other global industry sector has experienced comparable growth rates or volumes." But a lack of high-dollar deals proves it's not majors acquiring majors that's driving the trend. Instead, it's majors acquiring juniors, and juniors acquiring other juniors – which means the types of companies covered in International Speculator are where most takeover activity is focused.
- "Buyers extend geographic reach to acquire five key resources." The PwC report found that topping the list of primary resources picked up in takeover deals were gold and copper (silver deposits often go hand in hand as a byproduct of both of these), at 44% and 19% of transaction volume respectively. So again, International Speculator companies are a big target here. Further, buyers have been willing to pick up high-value projects in areas with higher political-risk profiles. While we avoid the highest-risk jurisdictions, we find mainstream views of political risk are often overstated. So, an increased tolerance for political risk means many of the more speculative picks in our portfolio make likely takeover targets.
The Best Profit Opportunities in the Coming Gold & Silver Mania
Bull markets consistently have three distinct phases:
- The Stealth Phase: prices are cheap and the investment is hated or forgotten. That's long gone for gold and silver
- The Wall of Worry Phase: the market recognizes the investment's potential, but denials abound, and corrections trigger calls of the "bubble" bursting. Sound familiar?
- The Mania Phase: big money and mainstream investors pile in with reckless abandon, multiplying asset prices and creating parabolic spikes.
The Mania Phase in precious metals is just beginning. Gold and silver prices will go higher than we expect, faster than we expect. Yet the best-of-the-best junior precious metals companies featured in Casey International Speculator should do even better, because when the price of gold goes up, their profits go up even faster.
Thanks to their leveraged exposure to gold's price, these little companies will hand investors big gains in the coming mania.
If you want to take advantage of this tremendous profit opportunity, you need to be positioning your portfolio now.
But will the trend continue? According to the PwC report, the answer is a definitive "Yes!" Here are three big predictions for what PwC sees going forward:
- "There will be a heightened pace of deal activity, especially in the "five key resources." More activity across the board makes it likely we'll see more wins in the coming months, too.
- "Chinese entities will endeavor to earn a spot amongst the global mining elite." China's been snatching up resources in a serious way, including mining companies. More buyers for a limited pool of resources? Sounds like a recipe for bigger wins for us.
- "Frontier markets will be at the forefront of mining M&A. Understanding and managing political risk will be critical to deal success." We always evaluate the political climate in which a company operates before recommending it to readers – it's a core part of our "Eight Ps" system for resource company evaluation. (This is covered in more detail below.) And because Louis has looked at literally hundreds of these companies over the years – usually visiting the projects in question and getting an "on-the-ground" sense of what's really going on before a recommendation – he's developed a real knack for teasing out perceived political risk from real risk. Occasionally a pick gets burned on a government's about-face, but more often than not the system proves out... and readers collect big gains, takeover or not. Increased takeovers in these markets just make it all the more exciting.
So are there more big takeover wins in our future? All signs point to a big "Yes!"
So What Makes a Junior Resource
Company a Compelling
Far and away the biggest driver for a takeover is value. If the company making the acquisition believes the investment will pay off, it makes the investment.
Sounds simple. But finding value in junior resource companies isn't as simple as looking at P/E ratios, profit and loss statements, and sales projections.
Sure, the biggest value of a junior resource company is the resources in the ground. But it's not just the resources themselves – it's how easily and affordably those resources can be extracted and sold for a profit. And that takes a number of factors lining up.
Though, if a company is sitting on the right rock... in the right place... with the right potential for bringing the resources to market... that company can be immensely valuable despite fundamentals (such as negative cash flow) that would look like deal-killers in most industries.
That's why a lot goes into the not-so-simple calculation of the true value of junior resource companies.
Checking Off the Eight P's to
Uncover Profit Potential
The difficulty in finding a true value for junior resource companies is why Doug Casey created "The Eight Ps of Resource Stock Evaluation" – the system Louis James uses to uncover the best investments in this sector.
Looking at these Eight Ps helps you identify in any market which resource companies are trading at an attractive discount to the current and potential value they represent:
The Casey Connections:
It's Who You Know That Matters
The single, most important factor that makes a junior mining company successful is the people. Sure, the other elements can line up, but unless you have the right people, even having the best rock in the ground can't guarantee solid investment returns.
Doug Casey and the Casey Research team have been neck-deep in the resource industry since the 1970s. Casey's network of connections reaches into just about every resource explorer and producer out there. And if our researchers and analysts don't know a particular member of a company's management team, they know someone who knows them.
Before a recommendation is considered, Louis and the Casey International Speculator team take advantage of the Casey connections to make sure the company they're recommending is run by a top-notch management team. In fact, some of the best returns readers have enjoyed have been a result of investing in people before anything else.
This has proven out as a profitable strategy time and time again – and you can be confident knowing it's a core part of every Casey International Speculator recommendation.
- People. Who are the key players involved with the company?
- Property. Does the company have a credible ore body or a moose pasture?
- Phinancing. How are they going to pay for everything?
- Paper. What is the structure of the company?
- Promotion. How will they get their story out?
- Politics. How stable, safe, or meddlesome is the jurisdiction?
- Push. What's going to move the stock?
- Price. How much will the company be worth if it achieves its objectives?
Louis spends as much time as it takes to uncover the truth behind all the Eight Ps before recommending any company to readers.
And we're not just talking about learning the names and looking at company press releases – a full evaluation of a company almost always includes a site visit to speak with the people on the ground and to kick the rocks, plus reaching out to the Casey organization's extensive network in the industry to check out the people involved. And that's on top of running all the numbers and all the other homework that comes with a typical stock recommendation.
When you get a company where all the Eight Ps line up, and it's trading at an attractive price, that's when you know you have a likely winner.
And this is particularly important for you as an investor, regardless of whether or not a takeover occurs. Even without a takeover, there's big profit potential in finding these value plays in the junior resource sector. That's why companies in the International Speculator portfolio regularly double readers' original investments, even without takeover bids.
Of course, there are a lot of undervalued, high-potential stocks that make it into the portfolio which don't have imminent takeover potential. So what does it take to move a resource company from a great value to "imminent takeover?"
Identifying Imminent Takeovers to Profit From the Takeover Bump
The Casey International Speculator track record proves you can consistently find the best investments in the junior resource sector by running companies through the wringer of the Eight Ps. Yet it takes a bit more sleuthing to uncover high-probability takeover targets that can give you 40% or more in a single day.
Of course, it's worth it – the takeover bump is good for more than an adrenaline shot: it can help make your year when calculating total portfolio gains.
So what does a super-sleuth look for when trying to identify imminent takeovers?
Here's Louis James, Doing What Few Analysts Are Willing To Do
Louis James rarely makes a recommendation without a site visit to the company he's considering. This allows him to get on the ground, kick the rocks, talk to the people, and get a real sense of the viability of a project.
In fact, he spends about half his year crisscrossing the globe, checking out remote mining projects and sharing his findings with his readers.
There are few analysts willing to go to these lengths to bring you the best investment recommendations – and even fewer who make it a part of their standard procedures for evaluating a company prior to recommendation.
This also means Louis is far more familiar with most mining jurisdictions – and the companies operating within them – so they can be on the lookout for what makes a company an attractive takeover target.
- Joint venture projects – When Fronteer decided to buy AuEx, they were joint owners on the Long Canyon project. With the acquisition, Fronteer gained 100% ownership. As explained by Mark O'Dea, Fronteer's president and CEO, the acquisition was an "extremely positive move for both companies. Long Canyon is our flagship asset and owning 100 percent is important." It seemed only natural the smaller JV partner would be a takeover target for the larger one.
- Project proximity – Louis and his team recognized Antares as a takeover target largely because its Haquira project sat next door to the larger Xstrata's Las Bambas copper/gold project. Often this triggers consolidation both for the resources and for savings on infrastructure. In this case, though, the unexpected happened. First Quantum beat Xstrata to the punch by acquiring Antares to diversify its operations into South America… though it's worth noting that First Quantum and Xstrata will still likely pair up for infrastructure savings as their neighboring projects move forward.
- Processing facility proximity – Fronteer's 100% ownership of Long Canyon paid off as President and CEO O'Dea predicted. Mining giant Newmont had both expertise and sizeable processing facilities in the area. As soon as Fronteer had 100% ownership of Long Canyon, it made it easy for Newmont to sweep in and pick the company up, taking advantage of the current infrastructure in developing the Long Canyon discovery.
- Partial ownership – When Kinross took a 9.4% stake in Red Back, it became clear they were heavily interested in the company. With a stake that size, they bought a seat on the board and an inside look at Red Back's operations. Though Kinross' official press release called it a "show of support," Louis recognized this could be the first step to takeover. And of course, Louis was right.
- Similar projects – Not all mining projects are created equal. Political jurisdictions, deposit characteristics, and a hundred other factors can shape a project's success. Takeovers seeming to come out of left field can be anticipated by looking for companies that are looking for a new project for their current team. As Osisko moved toward production on its large, low-grade deposit at their Malartic project in Quebec, Brett was a couple steps behind on its similar Hammond Reef project in Ontario. When Osisko took over Brett, it could simply re-use the proven team behind Malartic's success in developing Hammond Reef.
There are a number of other milestones along the way that help predict a takeover, too. Confidentiality agreements between companies often signal that collaboration is coming down the pike. A shareholder bill of rights dictating how a takeover bid will be handled says a company is becoming takeover friendly and can be predictive.
One more development is great news for shareholders – whether or not it precedes a takeover.
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- Charles L.
As these explorers develop new projects, the resources in the ground are classified as Inferred, Indicated, Measured, Probable, or Proven. Sure, it's impossible to determine the exact amount of gold you'll get out of a deposit until you mine it, though these different classifications are the industry standard for measuring and predicting what's available.
After a junior explorer makes a discovery, it works to advance the deposit through the classifications. It's proving what's there – and it's also effectively removing risk from a project. If a big company knows exactly what a deposit contains, and what the rock looks like, it can estimate what it's going to cost to mine the deposit and bring it to market.
It's far less risky to acquire Proven reserves where you know these numbers than Inferred resources where even your best estimate is based on a bunch of assumptions.
And here's the important thing to remember. Because the types of larger companies that typically do takeovers are risk-averse (more often run by bean-counters than geologists), they'd rather have other people's money proving out a deposit, and only use their own to bring proven deposits into production – even if it's more expensive to buy a project after the deposit is known and quantified.
So they wait and watch potential takeover targets like a hunter stalking his prey – until a significant chunk of resources are Proven and Probable, then...
The company offers up the takeover bid that gives you the 40% one-day bump. Of course, all along the way it's been good for you... because with every step – as a deposit is taken from Inferred, to Measured and Indicated, to Proven and Probable – the market pushes up the share price as the project risk drops.
And that's why you often get triple-digit gains followed by a big takeover bump.
Seven Tiny Gold Stocks Ripe for Takeover
We've just put together a special report called Seven Tiny Gold Stocks Ripe for Takeover. The report details the seven junior gold and metals companies Louis sees as likely takeover targets in the coming weeks and months, including ticker symbol and an up-to-date recommended buy price.
This Research Report is Yours Free with a three-month, zero-risk trial subscription to Casey International Speculator...
As of the September 2011 issue of Casey International Speculator, these seven stocks have delivered readers an average gain of 73.5%. Though Louis sees far more upside to come – both as a result of ongoing developments on their projects as well as the potential for a big takeover bump.
Here's a little hint as to why each one makes such a good takeover prospect:
- Takeover Target #1: This company's flagship property sits right next door to a multimillion-ounce deposit. And the deposit crosses the property lines – talk about the ultimate in proximity. The gold will practically be sticking out of the neighbor's pit wall if both projects aren't developed together. It's likely the company's larger neighbor is only waiting for the deposit to be better defined and quantified before placing a takeover bid.
- Takeover Target #2: This company has multiple, substantial, high-grade projects near producing mines. Not only that, it's just consolidated ownership on its flagship project. This one's just a matter of time.
- Takeover Target #3: This company is aggressively developing and expanding its flagship project, proving it out with every updated resource estimate. It's a large, low-grade deposit that just keeps getting larger. Readers have already enjoyed strong growth as this project develops, but we expect it to soon reach a tipping point that brings the big boys knocking.
- Takeover Target #4: This company operates its flagship property under a 50/50 JV deal. It's been actively working on defining and extending a multimillion-ounce deposit. Although this one may take some patience, the more the drills turn, the more attractive it gets. And if the company snaps up its JV partner, the clock will start ticking on a takeover bid.
UPDATE: Takeover Target #4 is Trade Winds Ventures, which received a takeover bid from Detour Gold – their JV partner on the Detour Lake project – as the takeover report was being put together.
Shares shot up 45% in one day on the announcement, and subscribers who bought at the original recommendation saw 75% gains in under a year, with more upside still in Detour Gold. This just underscores the fact that Louis has his finger on the pulse of the industry and as a result has an uncanny ability to predict potential takeovers. It should also be a reminder to act now, to ensure you still have opportunities to get in on the other six.
- Takeover Target #5: This company's 100%-owned, multimillion-ounce flagship project has not yet answered the market's biggest question: will it be economical? (Our answer is "yes," especially at today's gold prices.) Not only that, the stock's on sale for no company-specific reason. These two factors, which we expect to resolve themselves soon, are giving us "fire-sale" prices right now on a high-value asset. Of course, once the company proves out the economics, the price should go up tremendously. And that's when we expect to see the takeover bid – especially because this property is sitting right between producing mines in a major gold belt in South America.
- Takeover Target #6: Down the road from Takeover Target #5, this company's developing a 100%-owned, monster deposit. But like #5, the market has, by our calculations, significantly undervalued the asset. That's good news for you though, because there's significant upside even before a takeover bid. And of course, as the project continues to be proven out through further drilling, the majors with projects in the area are likely to come knocking with an offer.
- Takeover Target #7: Our final takeover target has a 100%-owned "elephant" (AKA massive) deposit not far from a large, highly similar mine owned by a major with a penchant for takeovers. Not only that, the company has been proving out its deposit's economics using a gold price below $1,000, and it still looks good. Even better, it just keeps finding more to the deposit. And it's been taking all the right steps to move the property from exploration to production. When you're ticking off the boxes looking for takeover targets, this one sure looks good.
Why "Junior" Explorers?
The Casey International Speculator portfolio contains mostly junior, small-cap precious metals explorers.
These are volatile stocks. Many investors wouldn't want to touch them with a ten-foot pole. The risk of a stock falling double-digits in a day scares many investors off.
But we know that an intelligent approach to speculating on these tiny, thinly traded stocks can lead to dramatic gains – and get you the type of five- and ten-baggers that quickly increase your wealth.
Yet for every ten-bagger, there are thousands of losers. It requires thorough, systematic research. You have to vet every investment opportunity to ensure you're only investing in the best.
That's what it takes to minimize risk and to use the market volatility in the sector to collect outsized gains.
By following the Eight Ps system, informed by their years of experience, Louis James and the Casey International Speculator team help readers only invest in the lowest-risk, highest-upside plays in this volatile market.
Now here's the thing. Even if you did the research on your own and managed to uncover which particular companies these were, you don't want to jump in without looking. That is, some of these stocks make sense at today's prices. Some are even screaming, "Buy!" But sometimes you need to wait for market weakness, and then enter a limit order to make sure you're only getting in when there's the highest probability for gains.
That's because takeovers provide an instant revaluation by the market's most informed participants. You have to have an accurate assessment of what the right price is to:
- Get in...
- Add to your position...
- And back up the truck for more...
... to ensure you collect the biggest gains on market developments and get the takeover bump.
And thanks to the Eight Ps – plus Louis' and the rest of the Casey team's experience – you'll always know when to buy and when to sell, so you can scoop up value at a discount and get out when the risk outweighs any potential upside that remains.
And Even Without a Takeover
You Can Still Win Big
I started with $102k in February and by year-end I had $160k.”
“I am an airline pilot and mandatory retirement is only 4 1/2 yrs away. I'm doing everything I can to weather the coming storm and the Casey team will be a strong anchor to see me through. I recommend your daily newsletter plus the Casey Daily Dispatch to all the pilots I fly with. We pilots tend to be cheap, so I figure exposing them to the free Casey newsletters will eventually bring them "into the fold" sometime down the line. Plus, they can't dispute how my investments have done through my paid subscriptions – following the recommendations in the International Speculator, BIG GOLD, and a few other Casey subscriptions, I started with $102k in February and by year-end I had $160k. Keep it up. I read every word of it!”
- Bill T.
Of course, the free special report 7 Tiny Gold Stocks Ripe for Takeover focuses on the seven stocks most likely to give you the takeover bump in the coming weeks and months. And for the type of one-day gains that are sure to give you a shot of adrenaline, there's little like it in the investing world.
Yet the Casey International Speculator is chock-full of precious metals companies providing investors with big gains – with or without a takeover.
Just look at these current portfolio holdings (as of September 2011) for gains readers are already enjoying:
- Three silver producers have already handed readers gains of 144.5%, 161.0%, and 602.7% with more upside expected
- Darling silver story Silver Wheaton, originally recommended in 2005 (far before most of the rest of the world had a clue), has made readers 630.8% gains since its original recommendation
- And a handful of juniors have returned readers 62.3%, 73.6%, 116.9%, 329.8%, and 348.7% gains – with much more upside expected
Of course, not every current portfolio holding is a winner. The junior resource sector is volatile – so even if something looks like a strong buy at today's prices, it could still go down tomorrow. But that's why Casey International Speculator always provides a multi-tranche buying strategy.
Put simply, you don't want to load up on every recommendation at today's price. Instead, you get recommendations for "first tranche," "second tranche," and "stink bid." That is, at the "first tranche" price you buy enough stock to get in on the upside, but no more than about 1/3 of your ideal position. At the "second tranche price," you add a bit more. And you back up the truck when the stock hits the "stink bid," because that represents extreme undervaluation and a high probability of big upside.
In fact, thanks to that strategy many readers are sitting on even bigger gains than we track in our portfolio – because we use our initial recommended price rather than, for example, a lowest possible buy price to calculate portfolio gains.
A Warning Before
We Go Any Further
When you try Casey International Speculator risk-free for the next three months, you'll also receive these two additional special reports, risk-free:
- The Eight Ps of Resource Stock Evaluation: Doug Casey's tell-all on his system for evaluating and recommending resource stocks – this system has made Doug and many others millions of dollars.
- The Casey Research Guide to Investing in Canadian Stocks (for Non-Canadians): This is a must-read for non-Canadians because most recommendations are traded on the TSX and TSX-V exchanges out of Toronto.
These reports are yours to keep as our "thank you" when you try Casey International Speculator risk-free today.
In a moment, I'm going to tell you a bit more about the Casey International Speculator newsletter, and what it takes to get started with a three-month, risk-free trial. But first, I have to warn you:
Casey International Speculator is NOT right for all investors.
The stocks recommended in this newsletter are among the most volatile stocks on earth. They can shoot up 46% in a day, like Antares did when it got a takeover bid from First Quantum... but they can also drop just as much on negative news.
Many investors don't make any money because they buy and sell the news. A stock shoots up and they want in. A stock goes down and they bail out.
But following the guidance in International Speculator often means "buying when blood is in the streets." That is, you keep your eye on stocks with high fundamental value. Invariably, the price drops on market volatility. And you see the low price as a buying opportunity instead of a reason to get out.
Or taking a Casey Free Ride (that is, taking your original investment off the table) once a stock has doubled. Sure, this means you gain less from the stock if it doubles again. But you can sleep well at night knowing you're now playing with the house's money. And besides, you can start putting that capital to work on new opportunities.
If you have the intestinal fortitude for this type of investing (knowing it's what can bring you the biggest returns in this sector), then Casey International Speculator might be right for you.
It's a high-risk, high-reward business – yet through intelligent speculation you can minimize your risk while maximizing the rewards.
And one more quick warning. The Casey International Speculator recommendations most-often trade on the Canadian TSX and TSX-V stock exchanges. Some have listings in the US as well, but many do not – and as such are not available through your average US-based brokerage account.
Unless your broker is already set up to let you trade on the Canadian exchanges, you'll want to do the legwork to get set up to trade Canadian stocks, in order to get the most out of your subscription. This may or may not mean moving some of your speculative capital to a different broker that will allow you to do this.
For subscribers, we do offer a free report on how non-Canadian investors can get set up to invest in Canadian stocks. But if you're unwilling to do this, International Speculator (and junior resource investing in general) may not be a good fit for you.
Enviable Profits for Select Investors
Of course, if you're the select type of investor that Casey International Speculator is appropriate for, you have the potential to collect market-beating profits that many investors would envy.
Take the 2010 performance of the complete portfolio versus gold and the TSX-V (where most International Speculator stocks trade):
It's clear – select investments in high-quality precious metals companies can help you beat the market and gold, too.
All you have to do is look at our latest annual report card, published January 2011:
- All-In Performance: The average gain across all stocks recommended in Casey International Speculator since January, 2004 (inception of Casey Research, LLC), including the crash of 2008, is 57.7% over an average holding time of 21 months. This means that if you bought everything recommended, took profits on the first double, held until the position was closed, and did not average down during the bloodbath of 2008, you would have averaged 57.7% gains, and that would have taken, on average, 21 months. This return annualizes to 33% per year.
And that's based on some simple math we've come up with that prevents us from over-representing gains. Remember, these stocks are volatile, and there are often many opportunities to buy lower than our recommended prices and sell higher. Readers who take advantage of these opportunities often enjoy bigger gains than our official numbers.
Of course, even if you simply match our annual compound return of 33%, you can become wealthy quickly.
- In five years, 33% annualized gains turns $100,000 into $416,157
- In 10 years, your $100,000 becomes $1.7 million
- And 20 years turns your $100,000 into $29.9 million
These gains add up fast. You can see why speculators like Doug Casey, Rick Rule, Eric Sprott, and others have devoted their careers to seeking out these types of opportunities.
Of course, for you it's as simple as following the recommendations in Casey International Speculator.
BLOODBATH = OPPORTUNITY
A note about recent weakness in the precious metals markets: The gold market has taken a severe beating. The TSX Venture exchange – where most junior gold mining stocks are listed, including many from the Casey International Speculator portfolio – fell from over 2,400 at the beginning of March, to just below 1,400 at the beginning of October.
Louis had been predicting this all year, repeatedly telling readers to take profits off the table and reduce risk, hold cash, and wait for the coming buying opportunity.
Now it looks like we're in the middle of the best buying opportunity in junior gold stocks since late 2008.
And that's good news – because the buying opportunity in 2008 led to some tremendous gains. The beating stocks took in 2008 was followed by Casey International Speculator total portfolio gains of 67.9% in 2009, and another 79.6% in 2010. As the market rebounds in the coming months and years, we fully expect to see similar gains across our portfolio.
And even more so for takeover targets. When the market's only heading up, the majors tend not to be as quick with premium-priced takeover bids. Though when these takeover targets go on sale, cash-rich companies are ready to pay strong premiums above market prices to ensure a takeover goes smoothly – as we saw with Trade Winds Ventures.
This gives you two ways to win on each of our takeover targets… though if you want to take full advantage of the market's weakness, you have to act now
Monthly Coverage of the High-Profit Opportunities in the Junior Resource Sector
Every month's issue of Casey International Speculator goes in-depth to show you what Louis has concluded are the best profit opportunities in the junior resource sector... and also to help you discover how you find these opportunities for yourself.
Here's what you'll find in each issue...
I have achieved intellectual and financial freedom"
"I started buying gold six years ago, and with discipline and the help of you folks, my speculations will allow me to retire from my own law firm by the end of this year. I have achieved intellectual and financial freedom. I might have achieved this eventually without the help of the Casey gang, but certainly not this quickly. Thanks.”
- Dominick G.
- A letter from Louis: Each issue begins with a letter from Editor and Chief Metals & Mining Investment Strategist Louis James about the big trends driving the precious metals and junior explorers markets.
- Feature articles: Louis and other members of the Casey team weigh in on everything from calculating gold mining costs in analyzing a project's potential to country-specific developments in mining laws that may impact our investment strategy going forward.
- Notes From the Field: Nearly half of Louis' time is spent crisscrossing the globe, kicking rocks, checking drill cores, talking to the people on the ground, and evaluating investment opportunities. You'll receive regular updates on where he's been and what he found.
- New Recommendations: In nearly every issue you'll find one or more new additions to the portfolio, rigorously analyzed using the proven Eight Ps system. Not only that, you'll get specific advice on where to buy for the best profit opportunity (even if that means waiting a week, a month, or more to get in).
- Recommendation Updates: Drills are always turning, markets are moving, and a hundred other factors are influencing the recommendations in the International Speculator portfolio. Each month you'll get an update on where we stand, strategies for the current market, top picks to buy today, and current buy/sell/hold recommendations on the entire portfolio.
- Questions for Casey International Speculator: Get your questions about the newsletter, portfolio stocks, gold investing, economics, and more answered by Louis James and the Casey Research team.
And those are just the major sections. Each issue of Casey International Speculator is also loaded with additional information to help you become a better speculator and investor, and to lead you to the best profit opportunities in the junior resource sector.
Not a Cheap Investment, but Well Worth It
So by this time, you're probably wondering how big your investment is to subscribe to Casey International Speculator.
Frankly, it's not cheap.
I thought that your publication was for the rich”
“I want to thank you for your publication International Speculator. I must say that before subscribing to your publication, I knew very little about the resource sector. It was a stroke of faith that during an illness I came across your publication. I thought that your publication was for the rich. I was right for it turned an ordinary, dependent, divorced woman into a financially independent woman. In 1998 I bought a few shares and more than tripled my return. From then on I have followed your advice and bought International Uranium (up over 1,000%), Nevsun (up 136%), Paladin (up 178%), Banro (up 1,100%), and SurAmerica (up 3,420%). You have my gratitude”
- Lorna C.
I have cancelled most other newsletters”
“I can honestly say that Casey Research is the best financial advice I have ever received. The information and knowledge I have gained is invaluable. I eagerly await each issue. I have cancelled most other newsletters as they pale into insignificance compared to yours. I could continue to praise your service, but it is sufficient to say that in my opinion, there is nothing better.”
- Malcolm M.
The regular retail price of an annual subscription is $995. Of course, most subscribers make this back quickly by following Louis' and the team's recommendations.
But today with our Annual Auto-Renew option, you can lock in a $246, 25% savings – and get Casey International Speculator for just $749 per year. Not only that, you get to keep that low price for as long as you remain a subscriber – no matter what new subscribers pay.
Even better, get started for just $199.
If for whatever reason you don't want to pay the $749 fee today, you don't have to. Instead, you can subscribe using our quarterly option.
Pay just $199 today to get started with a 3-month subscription. You'll save $199 and 20% off the annual retail rate.
This low quarterly rate is locked in for as long as you remain a subscriber – and you can upgrade to the lowest-available annual rate at any time.
... Plus it's Risk-Free for
Three Full Months
Whether you go with the quarterly or annual options, you have three full months to "test drive" Casey International Speculator, risk-free.
Put it to the test. Read the current issue and browse the archives. Do your own research on the recommended companies in the portfolio.
Even buy a few of the companies and see how the stocks perform. (Chances are the next few months will bring some of the takeovers Louis is predicting -- along with the takeover bump!)
Take three full months to decide if Casey International Speculator lives up to everything I've said about it and more.
Then – and only then – decide if it's right for you. If for any reason you decide you're not completely satisfied, simply let our customer service department know. They'll be happy to provide a prompt and courteous full refund of every penny you paid – whether you ask for it tomorrow or in 90 days.
As the CEO of Casey Research, I wouldn't be happy offering products I couldn't stand behind. And I know I can only make a guarantee like this if the product delivers.
And Remember, the Takeover Report
Is Yours Free Just for Trying
Casey International Speculator
When you try Casey International Speculator risk-free for the next three months, you'll get...
- Each monthly issue delivered right to your inbox
- Access to the entire archive of past issues
- A portfolio page with current news and recommendations on each pick
- Plus the free 7 Tiny Gold Stocks Ripe for Takeover special report
- AND two more free reports: The Eight Ps of Resource Stock Evaluation plus The Casey Research Guide to Investing in Canadian Stocks
And as our thank-you for giving Casey International Speculator a try, you get to keep ALL the special reports whether or not you choose to remain a subscriber.
But These Opportunities
Don't Stick Around Forever
As Louis James has repeatedly proven, you can get good at predicting which companies will be the target of takeover bids that send the stock price soaring 40% or more in a single day.
But Louis will tell you – it's almost impossible to know when. It could be a year from now or tomorrow. But one thing's for certain, the opportunities don't stick around forever.
So don't wait – start your three-month risk-free trial to Casey International Speculator today so you can get your hands on the 7 Tiny Gold Stocks Ripe for Takeover special report and add these stocks to your portfolio.
It's easy to order – just fill out this simple order form.
You'll get access to the most recent issue of Casey International Speculator, the archive of past issues, the portfolio page with every current recommendation... and the 7 Tiny gold Stocks Ripe for Takeover plus two more free reports.
Fortune doesn't favor those who wait – you wouldn't want to hear tomorrow that any one of these seven stocks was taken over and you missed your opportunity.Try Casey International Speculator risk-free, starting today.
With the three-month guarantee, you have nothing to lose... and quite a bit to gain.
CEO, Casey Research
Portfolio is up 324% based on your recommendations”
“My BIG GOLD portfolio is up 324% based on your recommendations. Keep up the good work, guys.”
- Gilbert B.
My net worth went up $10,000 today.”
“You guys are great, my net worth went up $10,000 today on the BIG GOLD picks. Awesome, thank you.”
- Lyle A.
P.S. By the way, your subscription to Casey International Speculator also includes a complimentary subscription to BIG GOLD – Casey Research's newsletter on the best investments in the large-cap gold and silver mining stocks. This is a $129 value, but it's yours free when you subscribe today.
(If you're an existing BIG GOLD subscriber, we will automatically apply the balance of your current subscription to Casey International Speculator).
P.P.S. Remember, it's critical you take action today and start your risk-free subscription to Casey International Speculator -- because any of these takeovers could happen any day.
While Louis is always on the hunt for the best takeover targets, the seven opportunities featured in the 7 Tiny Gold Stocks Ripe for Takeover special report could disappear quickly (rewarding fast movers with a double-digit one-day takeover bump). I'd much rather hear that you were in on the gains than that you missed your chance.
UPDATE: As mentioned above, Trade Winds Ventures, one of the seven featured in the report, received a premium-priced takeover bid as the takeover report was being put together. Casey International Speculator readers were rewarded with 45% one-day gains, and 75% total gains in under a year. This just underscores the necessity to act now, before the next takeover bid hits.Try Casey International Speculator risk-free, starting today.