We have been tracking the MACD indicator on the ABX chart for six months, and the MACD indicator has crossed over the signal line, indicating a reversal is imminent, also a strong buy signal is noted, as the stock will resume its climb toward the "Buffet Rule" price of $44 USD per share or above. Under the Buffet rule, we take the square root og 22.5 times the EPS (3.35) times the Book Value of the stock (25.16) which gives us a share value of 43.55 for ABX stock = 23% undervalued.
AccumDistPrVol shows steady large-block distribution (selling) not accumulation over the past year. Funds have been selling this for awhile. Until funds start buying in volume again, expect the stock price to suck. Well, we are stuck in a trading range, low end is around $33.50/share and high end around $37/share. Just swing trade the sucker, that's what I'm doing. We will stay stuck in this trading range for all of 2013, IMO.
I think a better way to think about fair value is to look at what ABX paid for Equinox and then apply it to itself. They bot Equinox in '11 at $7.5 bn of which, $3.6 was goodwill/intangibles. So net, they paid about 1.9 x tangible book - I assume that looked like a good deal at the time. But now that Jabal Sayid is frozen by the Saudis until 2014 to get a new permit (must be a long line at the window) Im not so sure - ok getting off topic....So lets apply the same logic to ABX, they have 13.2 bn in tangible equity and 1.01 bn in truly diluted shares (inc options and RSUs). So using the same multiple they used to value Equinox, we get 1.9 * 13.2/1.01 = $24.83 per share....That is where someone might have paid back in 2011...today, not so sure.....this might be a better way to look at it than your formula
PS - I am still trying to figure out what their probability weighted reserves really are - any help there would be appreciated.
You sound "objective" but you really skew things towards the bearish case don't you. You know Barrick's gold mines are great performing and profitable assets (with the exception off ABG), and that P&P gold reserves will only increase. Or, if you had done any research, at least you should know that. So, applying the same factor 1.9 to the rest of Barrick is nonsense. Equinox was probably a stupid acquisition, but they will at least break even on it.