Steady Return Stock - AUY

Safe Gold The Steady Return Stock on the spotlight today is Yamana Gold Inc. (AUY), the Toronto, Canada based gold mining company for mines in Brazil and central America. The stock has been up stronger since the beginning of this year on surging gold and other precious metals prices. In addition we think the stock is a safe one to own and have less chance to go down according to the following analysis:

Technical
From the 52 weeks chart, you should see that the stock is a steady return stock according to the following characterics:

• first of all for the past 52 weeks both 50 day and 200 day moving average have been rising steadily. In addition both moving average have been going even stronger since the beginning of this year. This is the first sign of a steady return stock.
• secondly both 50 day and 200 day moving average have been going up at similar angle for the past 52 weeks. Although the angle of 50 day moving have become a bit steeper since January, the 200 day moving average have followed as well. This is another sign of a steady return stock.
• thirdly the stock for the past 52 weeks has stayed relatively close to the 50 day moving average. This is another sign showing the stock is a steady one as any aggresive surge too far away from the moving average will result in steep profit taking.

Financial
The financial statement also shows characteristics of steady return stock as the company has been getting steady growth in revenue for the past few years from 19 million in 2003 to $32 million in 2004 and then 46 million in 2005. However despite growth in revenue the company actually got surging net loss in 2005. As a result the company has too sell stocks and borrow money to maintain positive cash flow.

Steady Return Stock Rating(1 ~ 5, 5 means highest):
1. Market Potential(Gold): 5
2. Technical: 5
3. Financial: 3.5
Overall Rating: A