Metals Stocks: Questionable Value for Rest of 2013 (GLD, SLV, GDX, GDXJ, SIL, ABX, GG, KGC, NEM, AUY, FCX, SLW, CDE, SWC)

Exchange Traded Funds

The SPDR Gold Trust (NYSEMKT: GLD) and the iShares Silver Trust (NYSEMKT: SLV) are perhaps the best-known of the precious metal funds. In the past 12 months, GLD shares have dropped 3.5% and shares of SLV have lost 7%. Central bank gold purchases and purchases by ETFs are driving the gold price, whereas silver gets more attention for its role as poor’s man gold and its industrial uses. Neither of these can ever really be considered a value play, but that is not why people invest in precious metals in the first place.

Mining ETFs include Market Vectors Gold Minters ETF (NYSEMKT: GDX), Market Vectors Junior Gold Miners ETF (NYSEMKT: GDXJ) and Global X Silver Miners ETF (NYSEMKT: SIL). Over the past 12 months, shares are down from about 16% at SIL to more than 37% at the junior miners ETF. As the next few paragraphs indicate, that is not likely to change in 2013.

Mining Companies

Rising costs, labor troubles and diminishing ore quality get the blame for the mining industry’s poor showing in 2012. None of these issues is anywhere near a solution. One miner is getting back into the energy business to try to boost its profits, but except for the very largest mining firms that is not a widespread option.

Barrick Gold Corp. (NYSE: ABX) closed at $32.73 last night and has a market value of about $32.75 billion. The consensus target price from Thomson Reuters is $49.10, and the 52-week range is $31.00 to $50.02. Barrick has a dividend yield of 2.4%. The implied upside to the consensus target is 50%.

Goldcorp Inc. (NYSE: GG) closed at $36.13 last night and has a market value of about $29.3 billion. The consensus target price is $49.20, and the 52-week range is $31.54 to $50.74. Goldcorp has a dividend yield of 1.7%. The implied upside to the consensus target is 36%.

Kinross Gold Corp. (NYSE: KGC) closed at $8.27 last night and has a market value of about $9.43 billion. The consensus target price is $12.90, and the 52-week range is $7.11 to $11.68. Kinross has a dividend yield of 1.9%. The implied upside to the consensus target is 56%.

Newmont Mining Corp. (NYSE: NEM) closed at $45.25 last night and has a market value of about $22.46 billion. The consensus target price is $57.50, and the 52-week range is $42.55 to $64.43. Newmont has a dividend yield of 3.1%. The implied upside to the consensus target is 27%.

Yamana Gold Inc. (NYSE: AUY) closed at $16.76 last night and has a market value of about $12.6 billion. The consensus target price is $22.90, and the 52-week range is $12.68 to $20.59. Yamana has a dividend yield of 1.6%. The implied upside to the consensus target is 37%.

Freeport McMoRan Copper & Gold Inc. (NYSE: FCX) closed at $35.69 last night and has a market value of about $33.87 billion. The consensus target price is $40.15, and the 52-week range is $30.54 to $45.55. Freeport has a dividend yield of 3.5%. The implied upside to the consensus target is 12%.

Silver Wheaton Corp. (NYSE: SLW) closed at $37.18 last night and has a market value of about $13.17 billion. The consensus target price is $46.80, and the 52-week range is $22.94 to $41.30. Silver Wheaton has a dividend yield of 0.8%. The implied upside to the consensus target is 26%.

Coeur d’Alene Mines Corp. (NYSE: CDE) closed at $22.93 last night and has a market value of about $2.05 billion. The consensus target price is $30.60, and the 52-week range is $15.15 to $31.97. Coeur d’Alene does not pay a dividend. The implied upside to the consensus target is 33%.

Stillwater Mining Corp. (NYSE: SWC) closed at $14.41 last night and has a market value of about $1.68 billion. The consensus target price is $15.40, and the 52-week range is $7.47 to $15.24. Stillwater does not pay a dividend. The implied upside to the consensus target is 7%.

Implied gains on most of these stocks are too large to be anything but value traps. Freeport and, perhaps, Silver Wheaton are exceptions. Stillwater, the only platinum and palladium producer in the United States, is too small to have much impact on the expected global shortfall of platinum in the next couple of years, but the company obviously benefits if it can maintain and even grow its production.