|Bid||17.31 x 800|
|Ask||18.71 x 300|
|Day's Range||18.13 - 18.30|
|52 Week Range||16.86 - 20.84|
|PE Ratio (TTM)||N/A|
|Expense Ratio (net)||0.39%|
Barrick Gold (ABX) generated negative returns amounting to 9.7% year-to-date (or YTD) as of April 17. The stock has significantly underperformed its close peers Goldcorp (GG), Newmont Mining (NEM), and Agnico Eagle Mines (AEM), which returned 12.5%, 10.9%, and -1.9%, respectively. The VanEck Vectors Gold Miners ETF (GDX) returned -1.5%.
The recent unrest in the markets has had a significant effect on precious metals and mining companies. The US dollar has a prominent role in influencing dollar-denominated precious metals and mining stocks.
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.
In this part of our series, we’ll look at the correlation between gold and four mining stocks: Royal Gold (RGLD), Goldcorp (GG), Sibanye Gold (SBGL), and Gold Fields (GFI). Mining stocks mostly move with gold prices, but not always. Among these four miners, Gold Fields has shown the highest correlation with gold, while Royal Gold has seen the lowest correlation with gold on a YTD (year-to-date) basis.
Newmont Mining (NEM) is one of the very few gold mining stocks to have given a flat-to-positive return this year. Its strong project pipeline is the major driver behind its consistent-to-increasing production profile. To learn more about its outlook, read Why Newmont Mining Stock Fell despite the 4Q17 Earnings Beat.
Mining stocks’ correlations with gold are crucial because gold is the big brother of precious metals. The movements in the remaining three precious metals—silver, platinum, and palladium—mostly depend on gold’s movements. For our correlation analysis, we’ll look at First Majestic Silver (AG), B2Gold (BTG), Royal Gold (RGLD), and Goldcorp (GG). Mining-based funds also have high correlations with precious metals.
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 on this front with ratios of 3.6x and 3.9x, respectively. Goldcorp (GG) and Yamana Gold (AUY), on the other hand, have the lowest current ratios of 0.9x and 1.0x, respectively.
Most investors want to put their money in equities but may not be able to afford large stakes in valuable companies with higher priced stocks. For them, low-priced stocks could be attractive as these will enable them to buy more number of shares instead of just a handful of higher priced stocks for the same amount. For example, an investor willing to spend $10,000 can either purchase at least 500 shares of a stock trading under $20 or only 100 shares of a stock trading at $100.Source: Shutterstock
The Zacks Analyst Blog Highlights: Fidelity MSCI Energy Index, PowerShares High Yield Equity Dividend Achievers Portfolio and iShares MSCI Global Gold Miners
We have dug into ETFs that are below $20 and have AUM of over $300 million and average daily volume of more than 100,000 shares. These low-priced ETFs could lead to huge gains in the coming months.
During its investor day, Barrick Gold (ABX) outlined its organic investments that could drive long-term value for the company. Barrick is expecting four feasibility level projects to contribute more than 1 million ounces of annual production. In the short term, the company plans to strengthen its production profile through disciplined investment in its brownfield projects and mine exploration drilling.
Newmont Mining’s (NEM) all-in sustaining costs (or AISC) came in at $968 per ounce in 4Q17, which is 5.4% higher year-over-year (or YoY) and 2.7% sequentially. The increase in unit costs is mainly due to higher mill maintenance costs at Boddington and higher sustaining capital expenditure. Its full-year AISC came in at $924 per ounce, which is 1% higher than 2016.
The company ended the year with cash and cash equivalents of $1.03 billion. This liquidity position is more significant, given that the company doesn’t have any debt maturity until 2021, which should help it invest in future development opportunities. In its 4Q17 earnings call, Kinross Gold’s management sounded upbeat about the company’s strong financial position.