On March 5 I wrote, Multi-Year Lows Tarnish Gold Stocks where I mentioned that gold mining stocks were trading below their 200-week simple moving averages with Comex Gold futures still above its 200-week SMA. At that time gold had been above its 200-week since February 2002. That changed during the week of April 20 with gold falling below its 200-week SMA. Gold is now extremely oversold on its weekly chart profile.
As gold moved lower gold stocks were gradually downgraded to hold. On March 5, two of the eight gold miners had strong buy ratings, three had buy ratings and three had hold ratings. The last of the buy ratings ended on June 4. These downgrades as share prices moved lower were warnings to avoid gold and gold mining stocks.
In today's table of stocks, all eight are extremely undervalued by 40.3% to 66.6%. All eight stocks are down significantly over the last 12 months by 37.8% to 65.2%. The projected gains and losses for the next 12 months range from down 3.7% to up 6.6%. Six gold mining stocks have single-digit price-to-earnings ratios. All are significantly below their 200-day simple moving averages, so technically there is some upside on a reversion to the mean.
Reading the Table
OV/UN Valued: Stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine.
VE Rating: A "1-engine" rating is a strong sell, a "2-engine" rating is a sell, a "3-engine" rating is a hold, a "4-engine" rating is a buy and a "5-engine" rating is a strong buy.
Last 12-Month Return (%): Stocks with a red number declined by that percentage over the last 12 months. Stocks with a black number increased by that percentage.
Forecast 1-Year Return: Stocks with a red number are projected to decline by that percentage over the next 12 months. Stocks with a black number in the table are projected to move higher by that percentage over the next 12 months.
Value Level: Price at which to enter a GTC limit order to buy on weakness. The letters mean; W-weekly, M-monthly, Q-quarterly, S-semiannual and A-annual.
Pivot: A level between a value level and risky level that should be a magnet during the time frame noted.
Risky Level: Price at which to enter a GTC limit order to sell on strength.
Barrick Gold ($16.57 vs. $28.65 on March 5) set a 52-week low at $15.71 on Monday. My monthly pivot is $16.81 with a weekly risky level at $19.95.
Agnico Eagle ($26.14 vs. $39.19 on March 5) set a 52-week low at $25.41 on Monday. My quarterly pivot is $26.81 with a weekly risky level at $28.20.
Anglogold ($14.05 vs. $23.41 on March 5) set a 52-week low at $13.99 on Monday. My weekly pivot is $15.36 with a monthly risky level at $15.60.
Gold Fields ($5.11 vs. $8.05 on March 5) set a 52-week high at $5.08 on Monday. My weekly value level is $4.88 with a monthly pivot at $5.94 and quarterly risky level at $7.59.
Goldcorp ($23.58 vs. $32.03 on March 5) set a 52-week low at $23.12 on Monday. My monthly value level is $22.99 with a weekly risky level at $25.80.
IAMGold ($4.10 vs. $6.15 on March 5) set a 52-week low at $4.08 on Monday. My quarterly risky level is $4.90.
Kinross Gold ($4.87 vs. $7.53 on March 5) set a 52-week low at $4.83 on Monday. My quarterly pivot is $5.52 with a weekly risky level at $5.72. This is the gold mining stock that has been upgraded to buy from hold this morning. Kinross was trading at $6.48 when it was downgraded to hold on June 4. At $4.87 the stock fell another 24.8% before being upgraded this morning.
Newmont Mining ($29.02 vs. $88.66 on May 8) set its 52-week low at $28.29 on Monday. My monthly value level is $27.14 with a weekly risky level at $31.06.
At the time of publication the author held no positions in any of the stocks mentioned.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.