With all of the volatility and the trend towards safe havens there is one company that is doing very well in the gold business. DGSE Companies Inc (DSGE) stands for Dallas Gold and Silver Exchange and the name says it all. DSGE sells and buys bullion, rare coins, precious metals and jewelry for both retailer and wholesale customers. The company markets through 8 internet sites and about 900 landing sites as well as through real stores.

Recently, DSGE purchased Southern Bullion Trading, LLC, (SBT). SBT is among the biggest precious-metal trading chains in South Eastern United States. It owned more than 20 trading locations. This should increase profits and lower competition.

The DSGE balance sheet and income statement look good, but I am very concerned about the cash statement for the second quarter of 2011. A potential investor should investigate why they sold $500,000 in stock and borrowed $796,000 dollars and their cash flow is still $576,000 lower than the previous quarter. It could will be that this money went to their recent purchase of SBT, but it needs clarification.

At any rate, I like the business that they are in and if all checks out, this looks like a good stock buy. The stock has actually gone up over the last 2 years at a steady rate from 82 cents per share to $8.68 per share. I also like the fact that I can buy this for a very affordable price.