Why Barrick Gold (ABX) Could Be Positioned for a Slump

Zacks

Similar to wise buying decisions, exiting certain underperformers at the right time helps maximize portfolio returns. Selling off losers can be difficult, but if both the share price and estimates are falling, it could be time to get rid of the security before more losses hit your portfolio.
 
One such stock that you may want to consider dropping is Barrick Gold Corporation (ABX), which has witnessed a significant price decline in the past four weeks, and it has seen negative earnings estimate revisions for the current quarter and the current year. A Zacks Rank #4 (Sell) further confirms weakness in ABX.
 
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 2 estimates moving down in the past 30 days, compared with 3 upward revisions. Over the same period, the consensus has trended lower, going from $1.13 a share a month ago to its current level of 96 cents.
 
Also, for the current quarter, Barrick Gold has seen 2 downward estimate revisions versus no revision in the opposite direction, dragging the consensus estimate down to 24 cents a share from 27 cents over the past 30 days.  
 
The stock also has seen some pretty dismal trading lately, as the share price has dropped 12.7% in the past month.
 
So it may not be a good decision to keep this stock in your portfolio anymore, at least if you don’t have a long time horizon to wait.
 
If you are still interested in the Gold Mining industry, you may instead consider some better-ranked stocks including AngloGold Ashanti Ltd. (AU), NovaGold Resources Inc. (NG) and Golden Star Resources, Ltd. (GSS). While AngloGold carries a Zacks Rank #1 (Strong Buy), NovaGold and Golden Star hold a Zacks rank #2 (Buy). With favorable Zacks Ranks, these stocks may be better selections at this time.
 
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BARRICK GOLD CORP (ABX): Free Stock Analysis Report

ANGLOGOLD ASHANTI LTD (AU): Free Stock Analysis Report

GOLDEN STAR RESOURCES LTD (GSS): Free Stock Analysis Report

NOVAGOLD RESOURCES INC (NG): Free Stock Analysis Report


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