Range Resources Corp. (RRC): It’s The Hottest Sector Of 2013 — And I’m Staying Away

And right now there is a sector that is downright hated. In fact, the mood in this one sector I have my eye on is the most negative I have ever seen in my 14 years in the business.

I’m talking about the mining sector, which provides a great example of what a market looks like when it’s getting ready to offer good values.

I say “getting ready” to offer good values because I don’t think now is quite the right time to buy some miners. But that could change very soon…

Price-to-cash flow multiples have fallen off — but from what I’d call “very overvalued” to “somewhat overvalued.”

And stocks offering what some call low multiples do so because they’re staring down large debt positions. During the bull market of the past several years, money was available — and many firms took it, believing they were building to reap rewards from higher commodity prices in the future.

Those higher prices have failed to materialize, leaving companies saddled with debt burdens that could be unserviceable at current cash-flow levels. Buying such a business — even cheaply — simply carries more risk than reward right now.

So as investors interested in profiting from the real wealth created by natural resources, where does this leave us?

I’ve spent the past few weeks looking hard at all the different corners of the commodities space, and I’m convinced that the mining sector is where the value is. As I said, the trick is to look for what’s most hated in the space today…

What I’m finding may surprise you. But, in reality, it shouldn’t. In fact, a select group of miners has been absolutely battered this year — but now it’s time to start looking for bargains. I recently put together a chart you have to see that will make my point. I don’t have the space to share all the details with you here, but once you see it, I think you’ll understand why I am buying these bargain mining stocks. Click here to see it now.