In July I made Kirkland Lake Gold (NYSE: KL) my top stock pick of the month. Now in May I actually had it as a top seven trade in my private Power Investor trading group, but I still own KL and still believe it is going to continue to beat the performance of the stock market averages going forward. Frankly I see no reason to sell the stock.
In fact just yesterday it went 5.42% while AAPL went down -5.23% to show us the difference between a top stock in one of the top performing sectors of the market as opposed to something that is just an popular old story stock whose best times are now behind it.
Gold, silver, and the precious metals complex is now coming alive and no one can deny that anymore. When the Federal Reserve goes on an interest rate easing cycle it typically is the metals that benefit the most so it’s no surprise what is happening and when the stock market gets more volatile smart money moves into safety plays like bonds and precious metals too.
The good news is that this bull trend for the metals is just starting! And while gold is now attacking the $1500 an ounce level after smashing through $1400 in June silver has not yet taken off as much as gold has.
That is giving us an opportunity to get at the beginning of this silver trend. While many of the big cap mining stocks have taken off so much that there no longer is a good entry point for them there are many small cap stocks in the sector that have not yet completely run away.
With all of this in mind I am now making Aftermath Silver my top stock pick for August. The stock trades under the symbol FLMZF on the US OTC and AAG-H on the Vancouver stock exchange.
If you aren’t familiar with that H designation on the Vancouver listing it means that this is a completely ground floor stock opportunity as it has been what one would call a shell company stock for most of this year, but that is about to change, because the company has been doing a private placement financing to raise $2.5 million dollars to complete a big transaction to take over two key silver properties in Chile to explore and develop them.
The details are in this press release and this corporate PDF presentation.
At the moment the stock has only a $3.59 million market cap in terms of US dollars. I have been in and seen two past bull cycles in gold and silver and almost all of the junior exploration companies like this would reach market caps of at least $25 million and in some cases much higher than that.
So I see big upside potential here – remember this is a ground floor opportunity to get in a stock before the story for it has really even begun. I actually think this stock can go up more than KL has done since July, because of its chart consolidation pattern.
Aftermath Silver’s main listing is on the Vancouver exchange and the Canadian markets were closed yesterday for a holiday so the stock did not trade, but here is its US OTC listing.
As you can see in July the stock came out of resistance around 9 cents and has been trading around the 13 cents area now for the past two weeks for a consolidation phase.
When it breaks that range the next target I have for it is in the 25-30 cents area.
Now because of the “H” designation on the Vancouver exchange some American online brokers will not allow their client to buy this stock. I expect that to change quickly once the company announces that it has completed its financing. Once that happens I wouldn’t be shocked if Americans who can’t buy now end up buying then. Remember this is a ground floor stock.
I’ll be updating you on this stock this month as the situation develops. If you are not on my free email list then you should get on it by going here.
Disclosure: Michael Swanson has bought 200,000 shares in the private placement offering of Aftermath Silver mentioned in this post that includes 100,000 warrants with a strike price of 12 cents CAD. The shares have a four month hold from the date the offering closes. Because Aftermath Silver is a small cap stock with a market cap of less than $100 million he also is placing himself on a voluntary 30-day trading restriction period from the date of this post in which he will not buy or sell a share of Aftermath Silver stock. Some members of his private Power Investor membership group have also invested in the private placement and other members may have bought the stock in the weeks and days before this post as he made it a Top Seven Trading Position in the group in June in which he tracks his most favorite positions in a model portfolio. To join the Power Investor group yourself click here.
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-Mike
