Commodities & Metals
Can Gold's Shine Catch Up to Gold Mining Stocks?
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The largest gold mining stocks — with one exception — reached their year-to-date peaks at about the same time that gold did in late January. Since then, these stocks have watched share prices tumble by anywhere from 8.5% to 29.0%. Since mid-March, just one has roughly matched the performance of the metal itself.
For the year to date, the best-performing senior gold mining stock is Franco-Nevada Corp. (NYSE: FNV). Shares are up 6.3% since mid-March, but just 2.6% year-to-date. The company’s market cap is about $8 billion, and its forward price-to-earnings (P/E) ratio is currently a heady 63.10. The consensus analyst price target on the stock is $58.73, and shares closed Monday at $51.38. The potential gain comes in around 14%.
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The best-performing gold mining stock for the year to date is Newmont Mining Corp. (NYSE: NEM). Shares are up nearly 19%, but just 0.5% since mid-March. Newmont also trades about 10 times the volume of Franco-Nevada, with nearly 8.8 million shares changing hands every day compared, with about 890,000 shares Franco-Nevada. Newmont’s market cap is about $11.3 billion, and its forward P/E is 17.19. The consensus price target is $26.03, and shares closed most recently at $22.58, implying a potential upside of about 15.3%.
The largest gold miner by market cap is Goldcorp Inc. (NYSE: GG), with a market value of $15.7 billion. The company said Monday that it would sell its 40% interest in a Nevada mine to 60%-owner Barrick. That boosted the share price by about 4% on the day. Year to date, shares are trading up about 4.2%, as well as up about 2.3% since mid-March, after dipping by nearly 3% at the end of March. Goldcorp’s price target is $26.12, and shares closed Monday at $19.31, implying a potential gain of about 35%. The forward P/E ratio is 21.38.
Barrick Gold Corp. (NYSE: ABX) is the second-largest gold miner measured by market cap. It is valued at around $14.7 billion, and the stock’s consensus price target is $13.61. Shares closed at $12.61 on Monday, and the potential upside based on those numbers is about 7.9%. Barrick’s forward P/E ratio is 15.13. Barrick’s stock price has soared about 18% since mid-March and is up about 16.5% on the year to date.
The SPDR Gold Shares ETF (NYSEMKT: GLD) has gained about 2.7% year-to-date and is up nearly 5% since mid-March. The shares were trading around $116.50 on Tuesday, in a 52-week range of $109.67 to $129.21.
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