|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||2.86 - 2.94|
|52 Week Range||2.21 - 3.80|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||0.02 (0.69%)|
|1y Target Est||3.86|
Among the senior mining companies under review in this series (GDX), Agnico Eagle Mines (AEM) is trading at the highest EV-to-forward EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple, of 11.5x. As you can see in the graph below, AEM’s EBITDA margin is quite high. The company offers strong production growth, which is supported by a strong project pipeline.
Yamana Gold’s (AUY) stock has also underperformed the gold miners’ index (GDX) year-to-date by returning -6.6% as of April 17. AUY’s 4Q17 results disappointed, with the company reporting earnings far below analysts’ expectations. Its EPS (earnings per share) were -$0.20, below analysts’ estimate of $0.03. The major factor driving the loss was a $356 million non-cash impairment charge related to the remeasurement of its Gualcamayo mine and related expansion projects in Argentina. Investors are wary of Yamana’s inconsistent operational results.
After significantly outperforming peers in 2017, Kinross Gold (KGC) has underperformed this year. Until As of 17, Kinross’s stock had given a negative return of 9.7%—the same as Barrick Gold (ABX). Kinross’s 4Q17 results came in below expectations.
Investors are typically interested in gold mining companies’ (GDX)(GDXJ) ability to generate FCF (free cash flow) because FCF helps them invest in future growth—apart from the aim of returning cash to shareholders.
Usually, precious metal mining companies follow precious metals for price direction. Precious metals increased on Monday, April 16, 2018, as did most mining stocks.
The past one month has been good for precious metals with the exception of platinum. Gold, silver, and palladium have increased a whopping 3%, 6.4%, and 4.4%, respectively, during the last 30 trading days. Platinum has dropped about 0.97% during the same timeframe.
We discussed analysts’ revenue estimates for gold miners in the previous part of this series. In this part, we’ll discuss what analysts expect for these gold miners’ (RING) earnings.
On one hand, it has increased US growth projections due to the stimulus from tax cuts. Since these tax cuts are unfunded, the IMF believes that there will be a need for severe spending cuts in the coming years. It predicts that the US debt-to-GDP (gross domestic product) ratio will expand to 116.9% by 2023, surpassing Italy’s ratio, which should narrow to 116.6% by 2023.
At extreme levels, these ratings could even signal a change in direction, so it’s important for investors to track this data. In the senior and intermediate gold miner space (GDX)(GDXJ), analysts are the most bullish on Goldcorp (GG), assigning it 65% “buy” and 5% “sell” ratings.
In this part of our series, we’ll be looking at the correlation between gold and four mining stocks: Alamos Gold (AGI), Sibanye Gold (SBGL), Yamana Gold (AUY), and Pan American Silver (PAAS). Mining stocks mostly move with gold prices but not always. Among these four miners, Pan American Silver has shown the highest correlation to gold, while Alamos Gold has seen the lowest correlation on a YTD (year-to-date) basis.
Gold ETF investors bought 173.4 tons of gold in 2017, 9% higher year-over-year (or YoY). In 2018 year-to-date (or YTD), the inflows in gold-backed ETFs have been strong. As of April 13, ETF holdings totaled 2,186 tons, which is 5.2% higher YoY.
On April 13, US crude oil (USO) May futures settled at $67.39 per barrel—the highest closing level for US crude oil active futures in more than three years. Oil prices have been climbing lately due to geopolitical tensions, which have increased worries of disruptions to supply, especially in the Middle East. New sanctions on Russia could further lift oil prices.
While gold miners have been out of favor for a long time, that might be about to change. Since the uncertainty in the market is increasing, gold prices are poised to rise. This rise should be followed by gold miners (GDX), which are essentially a leveraged play on gold prices.
Index (PMI) data, output in the Basic Materials sector is rising. To the fullest extent permitted by law, IHS Markit disclaims any responsibility or liability, whether in contract, tort (including, without limitation, negligence), equity or otherwise, for any loss or damage arising from any reliance on or the use of this material in any way.
The Bureau of Labor Statistics released US jobs data for March 2018 on April 6. The job growth was weaker than expected. The US added 103,000 jobs in March as compared to upwardly revised 326,000 jobs the previous month. The economists were expecting an addition of 185,000 jobs in March, as per Bloomberg. While a slowdown was expected in March due to February’s surge underpinned by hiring due to unseasonably warm weather, the decline was more than what the market expected. The unemployment rate has remained at 4.1% for six months. The Fed is forecasting a rate of 3.8% by the end of this year.
LONDON, UK / ACCESSWIRE / April 16, 2018 / Active-Investors free stock reports for this morning include these Toronto Exchanges' equities from the Metals & Mining industry: Trevali Mining, Yamana Gold, ...
Another crucial factor that closely plays on precious metals prices is the US interest rate—more specifically, the Federal Reserve’s decisions on moving the interest rate. During the Fed’s meeting in the third week of March, it took a hawkish stance, causing precious metals to rise instead of fall. The Fed mentioned that it would like to raise interest rates two rather than three more times in 2018.
April 11, 2018, marked the fourth straight day of a rise in gold’s price. Gold rose 1.1% on the day and closed at $1,356.5 per ounce. The volatility reading in gold stood at 13%, a little higher than the previous day’s reading. Gold’s RSI (relative strength index) level also jumped to 61.
As gold prices remained buoyant, gold equities also rose. The VanEck Vectors Gold Miners ETF (GDX) rose 2.2% against gold’s 1.0% gain. Among the major gold equities, Yamana Gold (AUY) rose the most by 6.4%, followed by IAMGOLD (IAG), which rose 4.6%. These two stocks are more leveraged to gold prices as compared to their peers. IAG, for example, rose 148% and 41% in 2016 and 2017, respectively, against gold price gains of 8% and 13% in 2016 and 2017. Year-to-date (or YTD), AUY and IAG have returned -9.4% and -11.3%, respectively.
Yamana Gold (AUY) and Agnico Eagle Mines (AEM) also underperformed the Gold Miners Index (GDX) and gold (GLD) in 1Q18, falling 16.1% and 10.0%, respectively. However, their losses were smaller than those seen by intermediate peers Eldorado Gold (EGO) and New Gold (NGD), which fell 41.7% and 24.3%, respectively, mainly due to issues at several of their mines.
Gold prices rose ~1% in 1Q18 after rising ~13% in 2017. Gold prices are being affected by a number of factors, including rate hike expectations, trade war fears, the US dollar, and increasing volatility.
Recently, the unrest in the markets had a significant effect on precious metals and the US dollar. The US dollar has a significant role in dollar-denominated precious metals and mining companies. In this part of the series, we’ll look at miners’ RSI (relative strength index) scores and implied volatilities. The miners we’ve selected for our analysis are Yamana Gold (AUY), AngloGold Ashanti (AU), Hecla Mining (HL), and Iamgold (IAG).
The US dollar, depicted by the DXY Currency Index, was down 0.30% on Monday, April 9. The US dollar and gold tend to be inversely related to each other. The below chart shows the relationship between gold (IAU) (SLV) and the US dollar over the past one month.
Platinum is used in diesel-based generators while palladium is used for gasoline-based engines. The platinum market has been in short supply for the past few years. Since the beginning of 2018, platinum has increased 2.6%. In this part of the series, we’ll focus on the gold-platinum spread, which compares the price performance between these two metals. When analyzing platinum markets, it’s essential to compare the metal’s performance with gold, which is the most crucial of the four precious metals. The comparative performance of gold and platinum can also be analyzed through gold- and platinum-based funds such as the Physical Platinum (PPLT) and SPDR Gold Shares (GLD) ETFs.