I'm new to mining stocks, but if you look at the P/E ratio of any company, you get a pretty good idea if it is overbought or oversold. This stock was climbing before the announcement because it was oversold. If you factor in everything from their earnings announcement, the price should have stayed above 17 because the lower estimates for 2012 would bring the P/E ratio up to a more reasonable place. Now, if gold goes up, then their 2012 estimates are going to be wrong, because I assume they base estimates on the current price per ounce. On the flip side, if gold goes down, the numbers will be lower than estimated. So, at the end of the day it really comes down to where you think gold prices are going. I am anticipating at least 1900 per ounce by election day, and I would not be surprised if it is over 2000. If I'm right, $16 a share is going to look like the deal of the century. If I'm wrong, it won't be the first or last time.
I think the gold price can be anywhere. No one knows for sure. The important is cash is the king. IAG has 1.6 billion of cash, no debt. I am very surpraised it drops below $16 after the earning announcement which is not bad at all. People are just manipulated this stock. But they can only play for a short time. The company could annouunce buy back, then the shorts will really screwed. There is a good possibility they willuse some of this cash to do so soon.