Gold Miners Digging a Deeper Hole (ABX, GG, NEM)

By Douglas A. McIntyre Updated Apr 27, 10:26PM EDT · Published Nov 17, 9:53AM EST

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Gold_pic Gold mining stocks have a real challenge in the current environment. The top companies like Barrick (NYSE:ABX), Goldcorp (NYSE:GG), and Newmont (NYSE:NEM) are doing all they can to reduce costs in the face of falling demand and even faster-falling prices. They’ve got a ways to go yet.

Barrick’s P/E ratio for the past 12 months is around 11; Newmont’s P/Eratio is almost 20, and Goldcorp’s is nearly 22. Which P/E level seemsmore realistic: 10 or 20?

Barrick Gold Corporation (ABX) is down well over 50% at $21.75 today, with a 52-week range of $17.27 to $54.74.

Goldcorp Inc. (GG) is also down over 50% from highs at $20.87, with a 52-week trading range of $13.84 to $52.65.

Newmont Mining Corp. (NEM) is down right at 50% from highs at $23.85, with a 52-week trading range of $21.40 to $57.55.

In the past, gold has been the go-to safe haven for traders looking to escape a broad-based climate of international turbulence. It seems that if central banks have to only worry about their full faith and credit pertaining to the printing presses and with the Chinese and Indian consumers now in the same soup as the E.U. and U.S. that maybe gold isn’t quite as precious as everyone once thought.

Paul Ausick
November 17, 2008

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.