Thursday, May 27, 2010

What A Value Dichotomy

According to a report webbed by Resource Investor, there's a gold investment company with a current price-earnings ratio of 1.1. Its main holding, of Crew Gold, is worth more than its own market cap.

The company is Endeavour Financial, and it's selling at a huge discount to its net asset value. Since its a merchant bank/closed-end fund that puts its money in exploration juniors, it's a company that's easy to undervalue these days. According to the data on its Website, it's currently selling at a 53.4% discount to its book value per share.

It ain't the only one, either. Aberdeen International, a closed-end fund that gold exploration juniors like Crocodile Gold, is also selling at a 50% discount to its recent NAV.

How's that for a value dichotomy. On the one hand, PHYS is selling at about a 13% premium to its NAV even after that premium took a big hit. On the other, two exploration-junior closed-end funds (effectively) are sporting discounts that would be considered incredible for other industries. Value-oriented players may want to take note.


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