|Bid||12.79 x 28000|
|Ask||12.80 x 28000|
|Day's Range||12.74 - 12.86|
|52 Week Range||11.07 - 18.35|
|PE Ratio (TTM)||16.30|
|Forward Dividend & Yield||0.12 (0.94%)|
|1y Target Est||N/A|
At its June meeting, the U.S. Federal Reserve once again raised the federal-funds target rate by 25 basis points, to 1.75%-2%. In addition, the majority of officials at the central bank now expect four rate hikes in 2018, whereas at the March meeting they were evenly split between three and four hikes. The market also appears largely unfazed by an additional rate hike this year, as gold prices remained largely flat.
Steve Sosnick, Interactive Brokers chief options strategist, discusses his options strategy with Bloomberg's Julie Hyman on "Bloomberg Markets." (Source: Bloomberg)
Mean reversion can be a powerful trading tool, particularly with pair trades. One Wall Street analyst said it’s still too early to expect a mean reversion bump in underperforming Barrick Gold Corp (USA) ...
Gold prices haven't done much this year, but gold stocks have diverged quite a bit, with Barrick Gold (ABX) down some 9% since the start of 2018, while Newmont Mining (NEM) is up more than 3%. Given the stocks' relative performance, some investors may be tempted to scoop up Barrick, on the belief that it's gotten too cheap--but they should resist temptation, says Morgan Stanley's Piyush Sood. Sood argues that Barrick's underperformance looks set to continue through the rest of the year, and ahead of the company's final agreement with the government of Tanzania, he downgraded the shares to Underweight, and shaved $2 off his price target, to $12.
Once again, gold stocks are struggling. The VanEck Vectors Gold Miners ETF (NYSEARCA:GDX) and the VanEck Vectors Junior Gold Miners ETF (NYSEARCA:GDJX) both have dropped about 13% from January highs. Both ETFs are down YTD as well — with performance lagging the S&P 500.
In the previous part of this series, we looked at Wall Street analysts’ ratings for gold mining companies. In this part, we’ll look at analysts’ estimates for those companies’ (GDX) (JNUG) revenues going forward. These forecasts can be valuable when it comes to assessing analysts’ views on gold prices (GLD).
Tanzania will issue large-scale mining licences only after cabinet approval, a senior official said on Friday, part of new measures aimed at further tightening control of the industry. Tanzania, Africa's fourth-largest gold producer, is seeking a bigger return from its vast mineral resources by overhauling the fiscal and regulatory regime of its mining sector. "The whole government, through the cabinet, will now be involved in approving licences for large-scale mining companies to make sure that national interests are safeguarded," Minister of Justice and Constitutional Affairs Palamagamba Kabudi told members of parliament.
FCF (free cash flow) generation is important for gold mining companies (SGDM) (GDX). This excess cash helps miners optimize their financial leverages, invest in projects that can drive long-term value, and provide shareholder returns.
Up to a point, companies try to optimize their debt-to-equity mixes. In fact, it isn’t always negative to carry debt if a company can repay it through earnings. We can gauge this repayment capacity for miners using certain ratios.
Which Gold Miners Could Show Upside Potential after Q1 2018? One way to assess a company’s liquidity is to calculate its current ratio. Newmont Mining (NEM) and Kinross Gold (KGC) are doing the best among senior miners with ratios of 4.2x and 4.1x, respectively.
Which Gold Miners Could Show Upside Potential after Q1 2018? As precious metal prices started weakening, investors shifted their focus from high-leverage miners (GDX) (GDXJ) to low-leverage miners with sound growth plans, leading miners to trim their balance sheets. Newmont Mining’s (NEM) net debt at the end of the first quarter was ~$1 billion compared to $1.9 billion at the end of 2016.
Which Gold Miners Could Show Upside Potential after Q1 2018? Since high debt levels can strain a company’s credit rating and growth decisions, it’s important to look at its financial leverage. Barrick Gold (ABX) and Newmont Mining (NEM) were once considered the companies with the highest financial leverage ratios.
Which Gold Miners Could Show Upside Potential after Q1 2018? AISC (all-in sustaining costs) is an encompassing measure that helps compare miners’ performances. The SPDR Gold Shares (GLD) is the largest physical gold-backed ETF and tracks the changes in physical gold prices.
After making discretionary cuts on exploration and capital expenditure for many years, gold miners (GDX) (JNUG) have started to refocus on production growth.
Which Gold Miners Could Show Upside Potential after Q1 2018? Barrick Gold (ABX) produced ~1.1 million ounces of gold in the first quarter, which reflects a decline of ~20% YoY. Barrick Gold has maintained its production guidance of 4.5 million–5 million ounces of gold in 2018, which implies a decline of ~11% compared to actual production in 2017 as measured at the midpoint.
Among the gold miners (RING) (GDX) we’re looking at in this series, only Goldcorp (GG) missed analysts’ earnings expectations. The reaction to the beats and misses and the extent of gold beats and misses varied among miners. In the broader equities market in the S&P 500 (SPY), 78% of miners that have released their first-quarter results have reported a positive earnings surprise, while 77% have reported a positive sales surprise. According to FactSet, these are the highest percentages since it started tracking the data in 2008.
Gold prices rebounded on Thursday, May 24, and futures contracts for June delivery rose 0.5% from the previous day’s close of $1,296.2 an ounce. Spot gold entered the $1,300 territory as the US dollar got weak. Adding to the global tensions, Turkey (TUR) was in focus yesterday with its currency, the lira, dropping almost 2% after a huge emergency interest rate hike failed to ameliorate its problems.
Though most of the time, mining companies are known to closely track the fluctuations in gold and silver, on May 23, while precious metals fell, most miners stayed afloat.
The US Dollar Index (or DXY), which prices the dollar against a basket of six major world currencies, was up 0.36% on the day, and it’s risen almost 3.3% in the last month. The US dollar (UUP) remains a core determinant for gold and other precious metals. During the last month, gold and silver have fallen 2.5% and 1.4%, respectively.
Barrick (ABX) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.
Goldcorp Inc. Chief Executive Officer David Garofalo says he’s happy with his company’s portfolio of assets, but that doesn’t mean he doesn’t have a wish list. In an ideal world, the company would have an asset in Nevada’s Carlin Trend. Barrick and Newmont are there and we should be there,” he said in an interview in Toronto, adding he’d also like to acquire something in Peru.
Jun.14 -- Steve Sosnick, Interactive Brokers chief options strategist, discusses his options strategy with Bloomberg's Julie Hyman on "Bloomberg Markets."