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5 Stupidest Small-Cap Stock Investments

These companies have lost shareholders a lot of money this year

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Allied Nevada Gold

Allied Nevada185 5 Stupidest Small Cap Stock InvestmentsYTD Return: -83%

Allied Nevada Gold (ANV) is a gold and silver producer based in (you guessed it) Nevada. Unlike some skeevy penny stocks out there that claim to be speculative miners but actually don’t own a single mine or have the permit to start digging anytime soon, Allied Nevada is the real deal, with its open-pit Hycroft Mine producing a substantive amount of gold and silver last year.

But while legit, Hycroft has its risks. The mine operates under a process called “heap leaching” where ore is mined, crushed and soaked in chemicals that leach ores out of the rock. Then the solution is collected and the gold or silver removed from the liquid. There is a lot of environmental criticism over the process of heap leaching, and it’s not always efficient to simply crush big piles of rock and wait weeks for a chemical solution to draw gold or silver out of the ore.

Furthermore, if you haven’t noticed, gold prices have been in a free-fall — and right at a time when Allied Nevada invested in more heavy machinery to fuel its operations. The unlucky combination has gutted ANV stock in 2013, shaving more than $2.5 billion off the stock’s market capitalization since January.


Article printed from InvestorPlace Media, http://investorplace.com/2013/08/5-stupidest-small-cap-stock-investments/.

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