Northgate Minerals Corporation (Northgate) is a gold and copper concentrate producer in Canada. Northgate owns and acquires properties, explores for precious and base metals. FatCat is happy to find that it is currently trading at a good discount.
There is intrinsic risk of buying a foreign company, even when it is trading on an American stock exchange. There are more unknown because of the distance and difference in regulation. There is also the fluctuation of exchange rate. Should US dollar appreciates, the stock just drop value without anything actually change in the company itself.
FatCat takes very cause kitten step towards this mining company. The book speaks loader than any pundit.
- The value: NXG is trading at P/E of 6.59, comparing to industry P/E of 24.18, sector P/E of 20.16 and P/E of S&P 20.69
- The cash: FatCat pays more attention to cash than any other ratio. NXG's Price to Free Cash Flow is merger 7.47 compare to industry of 55.88 sector 37.05 and S&P31.85
- Last but not least, efficiency Net Income/Employee (TTM) 346,692 compare to industry106,518 sector 64,138 S&P114,032
Bottom line: FatCat added NXG to her portfolio.
