“We don't get many visitors around here,” they told me, as I was handed a hard hat, goggles, and steel-toed boots.

No visitors? To a zinc and lead mining company? You've GOT to be kidding...

A few months ago, I was checking out an Australian company called Zinifex... only I wasn't in Australia. I was just outside Nashville, Tennessee, at its U.S. zinc-smelting operations. It turned out that the hard hat the hosts handed me belonged to the Australian CEO.

I returned home and immediately recommended shares of Zinifex to subscribers of my newsletter Sjuggerud Confidential. That was three months ago, and shares of Zinifex are up about 50% since that initial recommendation.

Zinifex is a perfect example of what I love to find in an investment...

Specifically, I look for three things: 1) cheap, 2) hated or ignored, and 3) at least the beginning of an uptrend.

In Zinifex, we had all three in spades. As for number 1 –value – here is what I told my subscribers three months ago:

“With a current stock market value between $5 billion and $6 billion, and earnings potential in the current fiscal year of $2.5 billion, Zinifex is one of the world's cheapest stocks... at a price-to-earnings ratio of just above 2x. The company is raking in so much in cash earnings, it could buy itself (it could pay for its entire stock market value) in less than three years.”

As for number two – hated – what could be more hated or ignored than a company that mines zinc and lead? It's so hated, Zinifex's smelter outside of Nashville is one of the newest in the world... and it's nearly 30 years old.

Since I recommended Zinifex three months ago, the price of zinc and lead have done nothing but go straight up. Zinc is up from $1.50 to $2.00 a pound in those three months. This is great for Zinifex, as that rise is virtually all profit for the company. At the same time, the warehouse supplies of zinc are constantly dwindling.

Yes, shares of Zinifex are up a lot... but to me, they're still cheap at a P/E of 4.7 , based on analyst estimates for 2007.

Zinifex is a good example of the kind of research we do... we find things that are cheap, hated, and in an uptrend. And if it looks too good to be true, we'll go check it out first hand.

That's our “technique.” It really just boils down to finding assets that nobody else is interested in. After all, how many lead mines are you going to hear about at the holiday parties?

If you want our specific recommendations that come out of this research – like Zinifex – then I'd urge you to come on board as a subscriber.

Good investing,

Steve

Editor's note: Steve Sjuggerud is a regular contributor to DailyWealth, a free investment newsletter focused on the world's best contrarian opportunities. We write with a simple belief in mind: You don't have to take big risks to make big money with your investments.