Every resources investor dreams of finding the next Northern Star Resources Ltd (ASX: NST), whose share price is up an enormous 7,700% over the past five years. Even if the chances of picking a such a big winner are very slim.
But after the recent reporting season, if you're inclined to invest in gold stocks (it's certainly not for everyone), there's one junior gold miner which could be worth a closer look.
Perth-based gold producer, Beadell Resources Ltd (ASX: BDR) recently announced an 88% fall in statutory net profit for its 2014 financial year.
The profit downgrade was a result of lower ore grades and recovery, coupled with higher finance and non-cash expenses.
Looking ahead however, the company has restructured its debt and is forecasting strong gold sales with an all-in sustaining cost (AISC) of between $US810 and $US890 per ounce.
According to the Wall Street Journal, six analysts currently have buy recommendations on the stock, with the average price target being $0.52 per share. Whilst it's important to remind ourselves to take analysts' 12-month price targets with a grain of salt, right now, investor support for Beadell looks good.
Should you buy Beadell shares?
At its current share price of $0.305, Beadell is potentially trading at a 70% discount to the average price target of analysts. After its recent declaration of a 1 cent dividend per share, it's also boasting a forecast yield of 3.27%.
However before diving into Beadell shares, it's important to note that there are significant risks that come with investing in small-cap gold miners, so it's vital you go in with your eyes wide open and expect volatility.
