, the billionaire founder of Dreman Value Management once said,
"Investors repeatedly jump ship on a good strategy just because
it hasn't worked so well lately, and, almost invariably, abandon
it at precisely the wrong time." He also said, "A course of
investment, once charted, should be given time to work out.
Patience is a crucial but rare investment commodity."
With so much talk of silver and gold and the patience required in
those markets, here's a look at two precious metals mining stocks
in the portfolio of contrarian Guru
On the silver side, investor Dreman increased his Pan American
position by 168.76% quarter ending Dec 31, 2012. His current
shares are 1,404840.
Pan American Silver Corporation
is engaged in silver mining and related activities in Peru,
Mexico, Argentina, and Bolivia, and is exploring for new silver
deposits throughout South America and Mexico. Its main product is
silver, although gold, zinc; lead and copper are secondary. At
present, Pan American has or is developing mining projects in
Mexico, Peru, Argentina and Bolivia, and has control over
non-producing silver assets in those jurisdictions and in the
Pan American Silver Corporation (
has a market cap of $2.5 billion. The P/E ratio is 268.6, and the
P/S ratio is 2.4.
Dreman's holding history:
GuruFocus did a thorough financial and performance check up on
the mining company and found warning signs: The company has a
Beneish M-Score 0.92, higher than -2.2, which implies that it
might have manipulated its financial results. Also, Pan American
Silver Corporation's gross margin has been in long term decline.
The average rate of decline per year is -3.4%. Cash flow from
operations also shows a severe divergence from the reported net
income. This may suggest that the company is not receiving
payment from its customers or it has other activities affecting
its cash flow. Other warnings are that the company's assets are
growing faster than its revenue, and its inventory is building
up. Further, Pan American Silver Corporation's per share revenue
has been in decline over the past 12 months.
Two good signs are that the Pan American Silver Corporation
operating margin is expanding, usually a good sign. Also, the
PAAS stock dividend yield (1.6%) is close to a five-year high of
On the gold side, David Dreman also keeps buying Kinross Gold
He owns 773,511 shares of KGC, valued as $8 million, as of Dec.
31, 2012. His KGC shares account for 0.22% of his equity
portfolio. Dreman added his positions in the Sept. 30, 2012
quarter by 4.23%, again in the Dec. 31, 2012 quarter by 11.49%.
Kinross Gold mines and processes gold, and silver ore as a
by-product, and also explores and acquires gold-bearing
properties in the United States, Canada, Mexico, Ecuador, Brazil,
Chile, Mauritania, Ghana and Russia. The company says its
strategy is to increase shareholder value through increases in
precious metal reserves, net asset value, production and
long-term cash flow and earnings per share.
Kinross Gold Corporation (
has a market cap of $9.05 billion with a P/S of 2.2. The dividend
yield of Kinross Gold Corporation stocks is 2%.
See the GuruFocus financial checkup on Kinross Gold Corporation.
His holding history:
Articles on GuruFocus.COM
Dreman Value Management has a portfolio of 284 stocks with a
total value of $3.48 billion, and a quarter over quarter turnover
David Dreman's top buys, sells, and holdings:
About GuruFocus: GuruFocus.com tracks the stocks picks and
portfolio holdings of the world's best investors. This value
investing site offers stock screeners and valuation tools. And
publishes daily articles tracking the latest moves of the world's
best investors. GuruFocus also provides promising stock ideas in
3 monthly newsletters sent to