Q: Is there an opportunity to start a position at these levels? Gold has been strong for ~6 months and the share price on Newmont has been very weak considering that. I know they made an acquisition of Newcrest last year, was there an issue with that acquisition or is there something else at play keeping shares weak?
Given the notable monthly and quarterly closing price of gold last week, it seems like Newmont shares have solid potential upside from here. If you aren't keen on NEM, is AEM the preferred alternative or is there another gold miner you like?
Thanks!
Given the notable monthly and quarterly closing price of gold last week, it seems like Newmont shares have solid potential upside from here. If you aren't keen on NEM, is AEM the preferred alternative or is there another gold miner you like?
Thanks!
5i Research Answer:
Investors did not like the acquisition so much, but NEM has also struggled with earnings, production and growth. It has cut its dividend twice in the past 18 months, which hasn't helped. It is more leveraged also than peers. We would much prefer AEM. But in a gold rally NEM could 'bounce' more. FNV also can be suggested, or KRR for a smaller company. Gold shares have lagged bullion for sometime so it is encouraging to see them act better currently.