The Best Gold Plays in 2012 YTD: GDX, TRX, FNV, AEM

June 20, 2012, 07:45 am ET, BY Billy- Contributor| Editor: Thomas H. Kee Jr. (Follow on LinkedIn)

Our Trading Reports in this Article:

• GDX
• TRX
• FNV
• AEM

After a rocky finish to 2011, the price of gold has managed to grind out a 4.2% gain so far this year. This performance has lagged that of the S&P 500 and it has been an even tougher first-half for many of the gold miners as the Market Vectors Gold Miners ETF (NYSE: GDX) has stumbled to a 7.3% loss out of the blocks so far this year.

Not all gold related investments have underperformed in the first-half of the year. A handful of trades have been big winners. Here are three of the best gold plays year-to-date.

Royal Successes

Shareholders of Canada-based Tanzanian Royalty Exploration (NYSE: TRX) have scored outsized gains in 2012 as the stock has surged 84.6% since the beginning of the year. It is difficult to gauge where this stock may be headed from here, but the ride is likely to be a volatile one.

The company recently announced positive drilling results at its Buckreef project in Tanzania. Its stock is still somewhat speculative though given that Tanzanian Royalty has incurred $60.7 million in accumulated losses while it continues to develop its business.

Another Canadian company that has seen a strong performance from its stock in the first-half of the year is Franco-Nevada (NYSE: FNV). The company’s stock price has climbed 23.3% year-to-date.

In Q1, Franco-Nevada saw a 121% pop in net income on a 44% year-over-year increase in revenue. The robust results enabled the company to up its dividend for the fifth consecutive year since going public in 2007.

Clean Sweep

One other gold play that has turned in a market-beating performance as we head into half-time for 2012 is Agnico-Eagle Mines (NYSE: AEM). This gold producer also comes to us from Canada and has seen its stock spike 17.3% since the beginning of the year.

Agnico-Eagle is coming off of a particularly impressive Q1 in which its net income increased by 73.3% and revenue from mining operations improved by 14.8%. Production was up only slightly from the prior year quarter, but higher realized gold prices accounted for the majority of the company’s revenue growth.

Earlier this week, Agnico-Eagle completed previously announced maintenance at its Kittila mine in Finland. The work now has the company running at full capacity for the time being with additional maintenance being postponed until later in the year.

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