1-Star Stocks Poised to Plunge: Gold Resource?

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, gold explorer Gold Resource (ASE: GORO) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Gold Resource's business and see what CAPS investors are saying about the stock right now.

Gold Resourcefacts

Headquarters (founded)Denver (1998)
Market Cap$1.2 billion
IndustryPrecious metals and minerals
Trailing-12-Month Revenue$105.2 million
ManagementCo-Founder/Chairman/CEO William Reid
CFO Paul Oberman
Return on Capital (average, past 3 years)(61.4%)
Cash/Debt$52.0 million / $0
Dividend Yield2.6%
CompetitorsBHP Billiton
Grupo Mexico SAB de CV
Rio Tinto

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 51% of the 215 members who have rated Gold Resource believe the stock will underperform the S&P 500 going forward.

Earlier this month, one of those Fools, All-Star BuffettJunior1, tapped the stock as a questionable income opportunity:

It seems that if you just put the word "gold" in your company name the stock is automatically worth a thousand times its fair value. This is the same trick used in the 90's where all you had to do was put "dot com" in the company name and the stock price would shoot up to some ridiculous valuation. I was also very surprised to see that this company pays a dividend. Since this is still an exploration stage company and has obviously never been profitable, then why in the world would they pay a dividend? ... I truly cannot understand why anyone would invest in this...

If you want to retire rich, you need to protect your portfolio from any undue risk. Luckily, we've compiled a special free report for investors called "The Tiny Gold Stock Digging Up Massive Profits," which uncovers a much smaller miner with big potential. The report is 100% free, but it won't be around forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the newTrackPoisedToCAPS account.

At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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