It's just a trade tool, not a real investment. Gold needs to be $1400 and rising for this trade to go up.
Here's the problem with a mining co. like this;
Say they have $500M in gold in the ground.
They pay out expenses to dig the gold. That money disappears.
They sell the gold and receive X amount of cash.
Meanwhile, their mine is now worth that same x amount less becase that much gold just left it.
And the whole time they are paying taxes on the land and any "profit" if they make. So they are essentually just stripping their mine of it's gold at a loss and going back to shareholders for more money to keep doing it.
They shouldn't get any shares and they should give back 2/3 of their salary for losing so much value in the company. The cash rising slighly Y-O-Y is very deceiving. After a closr look, I see that receiveables/payables net fell $52.8M. That's a lot of money that just "vanished".
Warren Buffett says one simply needs to invest in the S&P each month and beat most other investments. He has been spot on!
He says that he would rather own farmland than gold because gold has no yield. Wake me up if he ever changes his mind.
Peter Schiff was wrong about the taper (twice) and he will be wrong about interest rates and gold prices. Why else would he be selling gold?
I've watched this co. go from $60M in cash and 0 debt to $17M and over $5M in debt in less than a year. Why can't you see reality?
Will they still be holding at $1075/oz? Will they stop digging at that price?
Yellen needs to trim the stimulus back more and raise the interest rates soon. The GDP (if you believe that) today gives her the green light to do so. That won't be good for gold.
Why would companies PAY for advertisement on TV and everywhere else just to sell gold if it's going to be worth so much more? Nobody paid for ads to sell their GOOG or AAPL stock when they were cheap. I highly doubt these gold pushers are doing strangers a favor and paying to do so.
And they are running out of cash.
You make alot of good calls. I followed you on ALU and made out like a bandit.
Keep up the good work.
Sentiment: Strong Buy
I'm with you all the way here. You made me a believer with your HIMX call at $1 and your Sprint call at $2.17. Keep up the good work and post more like you used to please.
Sentiment: Strong Buy
Or are we still waiting on that one? Seems like we could blow past the $117B mark that we own with this quarter's earnings release. How can the government possibly say they are entitled to any of FNMA if taxpayers are paid back in full + interest?
Seriously, FNMAT is trading at 40 cents on the dollar currently. $10.20 for a $25 coupon. The lawsuits are for this preferred, not for the common shares. I own commons, but I'm thinking of taking profits and buying FNMAT. Your comment and the quick thumbs down tell me it could be the wise move. Why are common shareholders so negative on the preferred shares when it is the same company? The preferred shares HAVE to go to $25 if the common shares have any chance of being worth anything in the long run.
Will those holders receive $25 per share, or pennies on the dollar?
If it's pennies on the dollar, then the common is screwed because that perferred come before FNMA in the pecking order.
Restoring the dividend soon?
Good to see that management realized that they wouldn't be able to handle the debt with gold prices falling.
Hopefully they can cut spending enough to stretch the remaining cash and find some profitable gold. But I wouldn't hold my breath since the gold is so deep.
Older plants eventually HAVE to be shut down. One in my state has been shut down for 20 yrs and the cost to babysit the spent fuel is ridiculous. Eventually, this massive cost, added to the original building cost and shutdown clean up cost, will be higher than the years of profit I would think. EXC, with $20B+ in debt and little cash, will be strapped once they need to shut down a nuke imo. I just think they should build their cash position and pay down debt rather than pay a dividend. We don't need another Dynegy.
how will they ever be able to afford to shut down a nuke? It's expensive to babysit that spent fuel (for decades!) when it's no longer producing. Maybe they should cut the dividend and build up some cash while they can.