stocks

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Intel: a cheap-ish growth stock?

Briefly, Intel may be a good investment due to:

  1. Cheap.  The P/E is around 10.3.
  2. In the long run, Intel will be able to consistently grow its revenues as we find more uses for computers (e.g. smartphones, tablets, cloud).  8% revenue growth will likely continue into the near future.
  3. Its economic moat.  Its dominant market position lets it enjoy economies of scale in R&D and in manufacturing.  On the fabrication side, Intel is almost always a step ahead when it comes to process size and process technology.

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Canada Lithium: why I sold out

In short, I don’t know how to verify the economics of its project.

I used to assume that (pre-)feasibility studies can be trusted to some degree.  However, I looked into Consolidated Thompson’s technical reports on the Bloom Lake project and then I looked at Cliffs’ numbers– there is a huge discrepancy.  The technical reports show operating costs of around $30-31/ton (see page 135 of the PDF for operating costs) while Cliffs is currently reporting cash costs around $85-90/ton.  So now I feel like I really don’t know what I’m doing… it seems like you can’t take anything seriously when it comes to juniors.

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Yukon-Nevada Gold (YNG.TO): definitely a value trap

Mines are a depleting resource.  Usually you mine the most economic ore first.  This causes the economics of the mine to get worse and worse as the mine ages.  Yukon Nevada owns the Jerritt Canyon project which is on its last legs.  Not surprisingly, its economics have gotten worse and worse.

Some value investors see value in Yukon Nevada (see VIC writeup).  I disagree.  The mine has negative cash flow and therefore is not making money.  It will probably lose even more money in the future and it should be closed.  That’s the reason why it was recently closed. Continue reading →