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Category Archives: ABX
Barrick Gold 10-Year Targets
Below are the valuation targets for Barrick Gold Corp. (GOLD) for the next 10 years. Continue reading
Gold Stock Q&A: March 17, 2014
A reader asks:
“(Barrick Gold Corp) ABX has seen considerable gains since the time of your last two purchases. Have you considered taking profits at this time?”
Our response:
Gold Stock Indicator
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Precious Metal Juniors or Majors?
Reader T.H. asks:
“What is your position on miner shares since the absolute destruction of share prices across the board? does it make a difference to differentiate between juniors and large miners? this sector could be setting up with spectacular gains if timed right.”
Our Response:
There are two types of gold stocks right now, investments and speculations. The investment category are those gold stocks that are members of the XAU or HUI index. Constituents of Market Vectors Junior Gold Miners ETF (GDXJ) are the gold stocks that are speculations.
Because many of the gold stocks that are part of the GDXJ will die on the vine, the best opportunity for taking advantage of the juniors is with GDXJ. However, keep in mind that GDXJ is a "product" and not an asset. Theoretically, assets can be held for the long-term while products must have a "sell by" date or price.
Below we have listed the gold and silver stocks that are ranked by payout ratio:
| Symbol | Name | Price | P/E | EPS | Yield | P/B | % from yr low | payout ratio |
| ABX | Barrick Gold Corporation | 14.11 | - | -0.86 | 5.8 | 0.61 | 5.13% | -93.02% |
| KGC | Kinross Gold Corporation | 4.61 | - | -2.16 | 3.4 | 0.53 | 1.99% | -7.41% |
| GOLD | Randgold Resources Limited | 62.69 | 14.1 | 4.44 | 0.8 | 2.09 | 0.66% | 10.81% |
| GFI | Gold Fields Ltd. | 4.94 | 5.03 | 0.98 | 2.9 | 0.7 | 5.57% | 14.29% |
| HL | Hecla Mining Co. | 2.78 | 61.48 | 0.04 | 0.4 | 0.69 | 4.40% | 25.00% |
| BVN | Compa | 14.12 | 6.19 | 2.28 | 3.9 | 0.98 | 5.38% | 25.44% |
| AU | AngloGold Ashanti Ltd. | 12.79 | 17.3 | 0.74 | 1.7 | 0.88 | 2.28% | 28.38% |
| SLW | Silver Wheaton Corp. | 19.34 | 11.99 | 1.61 | 2.5 | 2.08 | 8.73% | 29.81% |
| HMY | Harmony Gold Mining | 3.475 | 10.63 | 0.33 | 2.7 | 0.36 | 5.32% | 30.30% |
| GG | Goldcorp Inc. | 24.31 | 13.74 | 1.77 | 2.5 | 0.84 | 9.45% | 33.90% |
| FCX | Freeport-McMoRan Copper & Gold | 27.6 | 8.96 | 3.07 | 4.6 | 1.45 | 4.27% | 40.72% |
| NEM | Newmont Mining Corporation | 27.12 | 8.27 | 3.29 | 5 | 0.97 | 2.26% | 42.55% |
| AUY | Yamana Gold, Inc. | 9.19 | 18.4 | 0.5 | 2.8 | 0.87 | 7.37% | 52.00% |
| AEM | Agnico Eagle Mines Limited | 27.8 | 18.6 | 1.49 | 3.3 | 1.37 | 0.22% | 59.06% |
| RGLD | Royal Gold, Inc. | 42.04 | 32.76 | 1.28 | 1.9 | 1.12 | 8.28% | 62.50% |
| GORO | Gold Resource Corp | 8.75 | 17.82 | 0.49 | 4.3 | 5.04 | 10.23% | 73.47% |
| AUQ | AuRico Gold Inc. | 4.54 | 27.67 | 0.16 | 3.6 | 0.55 | 12.47% | 100.00% |
| PAAS | Pan American Silver Corp. | 11.56 | 40.35 | 0.29 | 4.4 | 0.62 | 2.21% | 172.41% |
The precious metal stocks are arranged by the payout ratio, which in our opinion is the best measure of sustainability of the dividend. Dividend payout ratios of 50% and less are the most likely to be maintained. However, the trials that lay ahead in the precious metal sector may require more cuts in the dividend.
Two notes of caution are required. First, we’re not yield chasers and advise that gold stocks are not purchased based on dividend yield. Second, Barrick Gold (ABX) and Kinross Gold (KGC) are wild card speculations, with payout ratios in the minus column due to negative annual earnings. Investment in these companies are highly volatile plays that will pay off big. However, the challenge will be sitting through the gut wrenching declines that may be ahead.
Gold Stock Indicator
We rely heavily on our Gold Stock Indicator for signs of when to buy gold stocks. The reason for this is because we found the alternatives, the Gold/XAU and XAU/Gold ratios, to be highly deficient. These two ratios were thought to be the bedrock of indications on when to buy and sell gold stocks. According to well known analyst John Hussman, the Gold/XAU ratio has the following indications: