A very nice and positive mail was waiting for me in the inbox this morning from reader 'NS', who asked me what junior he (NS is male) should pick up at these low, low prices. His basic viewpoint is that buying a junior or twelve for pennies right now is a good scattergun policy. He thinks it unlikely that he'd lose a lot of money, as even if any stock drops another 50% he wouldn't have to lay out a big amount of money to get a good sold chunk of stocks and any loss would be small in absolute terms.Y'know, the more I think about that attitude the more I like it. It wouldn't take more than two or three real springers in a high risk portfolio like that to get the whole thing into the permanent profit column, and it would also be great fun to own. This as long as you're clear that buying into pennyshoots is high risk and it can mean wild swings in both directions (or in other words it's certainly not for everyone).
As for some stocks to consider, right now I'd be looking for two types of junior mining company:
1) With plenty of cash at bank and beaten down to a pulp. An example of that would be Inca Pacific (IPR.v), a company with more cash at bank than market cap. And even though that's a very strange and weird thing, there are plenty more examples out there of the same phenomenon.
2) Working mines with good cash flow that have also been beaten down to a pulp. My favourite here is Fortuna Silver (FVI.v), a company that could double and still be dirt cheap at a buck. But yet again there are plenty of others; one that's been catching my eye recently is Malaga (MLG.to) which at 10c a pop means for $1k you can get 10,000 shares of a working mine producing a specialty metal (tungsten) with good market prices and guaranteed demand. It's also in the process of smoothing its production process and cutting down on the key energy cost element.
FVI.v, IPR.v and MLG.to are solid examples, but the two categories are more important, I believe. So I suppose my best advice right now would be to look in those two criteria and then "buy your own favourite!". We all have our sweet stocks, and a few shekels invested at current low prices isn't sucha bad idea as long as you're willing to look to the long term. By the way, if you'd like more fundamental information on any company, with a pro-analyst's view of its operations, potential profitability, management and financials, you could always consider investing a small amount in a NOBS report. Details of how it works can be found right here.
DYODD, dude.