Yield? Risk? Bounce back? Considering any measure, there are better AND safer bets.
Can any real investors explain their rationale? - save your pumps or bashes, I am just looking to understand your viewpoint of why you would pick this company as oppossed to the 20 others available.
I wouldn't pick this one. Look at the debt ratio. Pick something better like GG or NEM. This stock is pure #$%$ and with the debt load and gold price right now I don't think the dividend will stay at this level for too long.
Biggest gold miner. High yield. Trading below book. Chilean problems create vast upside potential long-term. If your investment horizon is two years or more, this is a bargain. If it's fifteen minutes, look for other opportunities.
I don't own ABX, but have been watching all the miners since late april. Why ABX?
They are a market leader. In my mind that is worth something. You must be doing something right to be a leader in a field.
The price has been hammered much more then NEM for example. ABX is below the 08 low. I think its a case of how much worst can it get? The maximum downside is maybe 3, 4 points. I don't see it staying in single digits for a long time. I don't think the mining industry is as structurally damaged as say...aluminum (alcoa?). There are many factors supporting gold prices (asian demand, QE around the world). Gold may dip to $900-1,000 in the next 6 months. It was up 12 years in a row? I am also looking at gdxj, junior miners index.
Also ABX has 47% of production from North America. 22% south america. If it was like 40% from africa, or some very unstable country I'd be much more cautious. PL seems to be fuel to the fire for an already disliked sector.
It has lost a great deal of value due to PL project, when in reality the issues are not complicated and can be easily resolved with the additional time available. Also one would not pick this alone but as one of 2 or 3.
You have to be joking, Pascua Lama is Barricks biggest problem and the title fraud is what is taking this company down. Why don't you get on board with one of the 7 class actions against Barrick over this Pascua Lama scam? Try keeping up with the times, Barrick is sued in Chile all over the place with their Pascua Lama fraud.
Lowest all in cost of the majors; has the ability to cut costs significantly buy laying up the high cost mines/operations and still be Nr. 2 in net equivalent gold production; capable of getting all-in cost below 900 quickly and may already be there; currently liquidating assets to address debt; took the biggest hit out of the majors. I wouldn't put all my eggs in one basket, but ABX should be in the basket. Disclosure: I built an overweight basket last week in SLW, ABX, AUY, EXK and AEM. Still adding on weakness. Holding common and Call leaps deep in the money. This basket has already yielded about 15% over seven days or so. GLTY!
Translated from Chile media, source El Ciudadano:
New check to Barrick Gold: Chilean court opens trial legality of Pascua Lama Protocol
Total and absolute rejection had the appeal filed by the State Defense Council, acting on behalf of the Government of Chile by the Ninth Division of the Court of Appeals of Santiago, in cars Docket No. C-17.273- 2012, entitled "Lopehandia Cortés, Jorge Rodrigo Fisco" 23 ° filed before the Civil Court of Santiago and that relate to the legal nullity would Pascua-Lama Protocol. The decision of the Judges, open a case that could lead to even declare former presidents.
Note that in the first instance the State Defense Council had refused to discuss the existence of fraud in the signing of the Protocol Pascua-Lama. Treaty between Chile and Argentina that created a virtual country over the Andes to the exploitation of its natural resources.
However since the protocol was published in the Official Gazette of Chile and he became aware of the country's highest authorities, whichever is discussed and researched has become a fact.
Retrieved lawyer Juan Guillermo Torres that said "Tuesday June 25, 2013, were made the allegations of the parties, the Chilean Government through its lawyer and representing their interests, who talks, in which this part founded the rejection of the appeal and thus requires confirmation of the judgment of first instance, by means of separate legal defenses both form and substance, a resource that was eventually rejected by the Ninth Division of the Court of Appeals of Santiago, which is an absolute triumph for this cause. "
"Nuevo jaque a Barrick Gold: Corte chilena abre juicio por legalidad de Protocolo Pascua Lama
Total y absoluto rechazo tuvo el recurso de apelación interpuesto por el Consejo de Defensa del Estado, actuando en representación del Fisco de Chile por parte de la Novena Sala de la Ilustrísima Corte de Apelaciones de Santiago, en los autos Rol N° C- 17.273-2012, caratulados “Lopehandía Cortés, Jorge Rodrigo con Fisco”, tramitados ante el 23° Juzgado Civil de Santiago y que guardan relación con la nulidad legal que tendría el Protocolo Pascua-Lama. El fallo de los Jueces, abre un caso que podría llevar a declarar incluso a ex presidentes de la República.
Cabe señalar que en primera instancia el Consejo de Defensa del Estado se habría negado a discutir sobre la existencia de fraude en la firma del Protocolo Pascua-Lama. Tratado entre Chile y Argentina que creó un país virtual sobre la cordillera de los Andes para la explotación de sus recursos naturales.
No obstante dado que dicho protocolo fue publicado en el Diario Oficial de Chile y de él tomaron conocimiento las altas autoridades del país, el que sea discutido e investigado se ha convertido en un hecho.
Consultado el abogado Juan Guillermo Torres este señaló ” el martes 25 de junio de 2013, se efectuaron los alegatos de las partes, Fisco de Chile por medio de su abogada y en representación de sus intereses, quien le habla, en la cual esta parte fundó el rechazo de dicho recurso y con ello requiere la confirmación del fallo de primera instancia, por medio de sendas defensas jurídicas tanto de forma y de fondo,recurso que finalmente fue rechazado por la Novena Sala de la Ilustrísima Corte de Apelaciones de Santiago, lo cual es un triunfo absoluto para esta causa”."
And, BTW, there are no safe stock bets. Look at AAPL, why is its valuation so low? Sure, there are many stocks that are less volatile, but ABX can be just as volatile going up as it was going down. Since it is a leveraged play on the gold price, if gold goes up ABX should go up that much more.
Many world economies are having a rough time due to excess debt, recession and structural unemployment. The general state of the world economy is such that the central banks have to do QE to manipulate the markets. In some cases, there is a race to the bottom w/ regards to currency debasement (i.e. Japan). Because of this, people are more aware of the "man behind the curtain" central banks manipulating fiat currencies, resulting in less trust in fiat currencies. There is still the potential for economic "black swan" events that cause fear, like PIGS bank failure and/or ECB bailout in the Euro debt crisis, potential for Chinese hard landing, unrest in the Middle East, etc. China wants to reduce its reliance on the U.S. dollar as a reserve currency. Only reason why the U.S. dollar has strength is that it is currently perceived to be a safer haven than other paper currencies, however the U.S. economy has its own problems with deflation and structural unemployment, so U.S. interest rates will stay low indefinitely. Asians don't trust their fiat currencies and are in the habit of buying gold, no matter the price. Central banks regard gold as "riskless" tier 1 collateral.
So ... there are several reasons why the gold price could go higher. Also, gold is significantly oversold currently, due to recent $GLD ETF liquidations.