Research Pit

[Jagman]

GG...Shining stars
Even though the industry in general faces gloomy prospects, we think there are a few stocks that should be on investors' radar screens. These stocks have historically earned well in excess of their cost of capital and have respectable reserves.

Goldcorp (NYSE:GG - News).
Goldcorp has enjoyed enviably low extraction costs because its Red Lake Mine in Ontario has 2 ounces of gold per ton of ore as opposed to the 0.01-1.3 ounces found in the mines owned by larger North American companies like Newmont (NYSE:NEM - News), Placer Dome (NYSE:PDG - News), and Barrick (NYSE:ABX - News). Low extraction costs translate into healthy cash flows, higher margins, and higher returns on invested capital. Goldcorp's average ROIC is an impressive 30% since 2001, which is outstanding in the gold mining industry. Under new CEO Ian Telfer, Goldcorp has set its sights on using the cash generated by operations to acquire its way into the 2 million-ounce-per-year category. We expect to see a lot of action and growth here, though we would keep a close watch on acquisition prices.

Rest of article: http://biz.yahoo.com/ms/051019/146454.html?.v=1