Being Street Smart
Stock of the Month: ASA Ltd.
By Sy Harding, Street Smart Report Online
Sy Harding's Stock of the Month is ASA Ltd.
(NYSE ASA) a closed-end investment company that invests primarily
in South African mining companies.
ASA is incorporated
in Africa and must keep at least 50% of its assets invested in
South African Gold Stocks. Up to 20% of assets can be invested
outside of Africa.
As of its latest
report it was 64% invested in South African gold mining companies,
with 35% in Gold Fields Ltd., 21% in AngloGold Ltd., 6% split
between Canadian mining stocks Barrick Gold and Placer Dome,
and 4% in the U.S. in Newmont Mining. In addition to those gold
stock positions, its holdings include 17% split between South
African platinum mining companies Anglo American PLC, and Impala
Platinum.
Therefore ASA
provides diversification in playing the precious metals sector.
It is also a way to have some exposure in platinum, which has
been beaten down to five-month lows by concern that SARS virus
fears in China and Asia, the world's largest market for platinum
jewelry, will cut into jewelry sales there as Asian consumers
stay home.
Meanwhile, we
have another buy signal for ASA on the charts and in technical
analysis. ASA came down precisely to the trendline support where
it has found support on every pullback since gold ended its long
bear market in 2000.
