Guru David Dreman – Silver, Gold, and Patience

April 1, 2013 at 08:50


David Dreman, 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 David Dreman .

On the silver side, investor Dreman increased his Pan American Silver Corporation ( PAAS ) position by 168.76% quarter ending Dec 31, 2012. His current shares are 1,404840.

Pan American Silver Corporation ( PAAS ) 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 United States.

Pan American Silver Corporation ( PAAS) has a market cap of $2.5 billion. The P/E ratio is 268.6, and the P/S ratio is 2.4.

On the gold side, David Dreman also keeps buying Kinross Gold Corporation ( KGC) .

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 ( KGC) 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%.