Coure D’Alene, CDE, is a commodity stock play on the gold and silver market. Their past couple years of results have not been too lucrative as they have been holding lots of gold and silver as reserves and the prices went down the roof, but the future looks might brighter with the recent gains in commodity prices. They are currently stockpiling their reserves until they find a good time to sell. They do not hedge their commodities.

Earlier this year they significantly expanded the production at Palmerjo and started operations at the Kensington mine. If you know commodities, the average gold to silver ratio is 16:1 which would mean silver would have to multiply to at least 3x the current price. It has been stated that gold will move up to $5,000 over the next decade. Their new mining operations have break-even point at $900 gold and silver at $8.50 an ounce. These break-even prices are very conservative. If gold and silver never rise, they would still be profiting at the current mining costs.

Technically, the stock price is undervalued. It just broke out of support at $17.50. Other than the downturn in 2009, the last time was 2003 when it was in the $18 level. The volume continues to look good – It doesn’t look like it will be stopping anytime soon.

Currencies are looking negative. The world is running on debt. Greece needs money to prevent a default. California continues to be desperate to raise cash. PIGS is next in line to require a bailout. United States continues to print billions of dollars to make up for the mortgage crisis.

There is a bunch of problems right now but there is always a way to profit. Institutional investors like gold mining stocks. This includes George Soros and Jim Rogers. Invest like the big guys that make money and buy CDE.

Disclosure: I own CDE (of course!).