XAU

Scott Barbee believes precious metals and mining investments represent good value. Despite the run-up in gold prices, he sees them trading at excellent levels relative to free-cash-flow yield projections. He is bullish on gold due to the macroeconomic environment, including U.S. deficit spending, global government debt, potential for higher inflation, central bank diversification away from the U.S. dollar, and geopolitical uncertainty. He focuses on companies with competitive cash flow yields and low financial leverage to mitigate risk.