This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Gold Stocks: 4 Miners to Watch as the Price of Gold Rebounds

Chris Lau, Kapitall: A rebound in gold prices doesn't necessarily mean it's time to start buying up gold stocks. 

2013 was a horrible year for gold. As the markets rose by double digits, gold fell by an equal amount. But this year began with a rebound in gold stocks, which in turn has boosted the share price of gold mining stocks. A number of factors – including rising development and acquisition costs – had already strained balance sheets across the sector. 

Still, it might be time to look at gold miners again.

Gold at $1200

Gold prices are at levels far below the $1600 range seen in 2013. Any rebound in gold prices this year would boost gold miners directly:

goldcharts

 

 

 

 

 

 

 

 

 

 

 

 

However investors should not count on rising gold prices alone to justify a position. It is notoriously difficult to forecast future prices. It is also difficult for investors to know when the government will end or reduce quantitative easing at significant levels. Until there is clear inflation, gold prices will likely continue to fluctuate.

Investors should consider mining companies that are taking a better effort in improving their balance sheets. Miners trail gold prices, because they face ongoing operational costs. Barrick Gold (ABX) is one company whose balance sheet looks severely stained from excessive exploration and acquisition costs: 

Click on the interactive charts to view data over time. 

A heavy debt burden also strains Barrick's forward P/E, which is the lowest among some of the biggest gold miners:

And the rest…

Goldcorp (GG) may have a high price of profit, but it is also on one of the best runs in its industry. Goldcorp met its 2013 gold production forecast in Q4. For the quarter, it produced 767.7K oz. of gold. And for fiscal 2014, gold production is forecast to grow by up to 18%. Meanwhile production costs are expected to fall.

Newmont Mining (NEM) could improve results by adding to low-cost operations this year. Investors should monitor for better free cash flow as 2014 progresses. In a similar vein,  Kinross Gold (KGC) may report smaller write-downs in light of the low gold prices. Its reserves already assume a price of $1200 per oz.

So do you see investing opportunities in these gold mining stocks? Use the list below to begin your analysis. 

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

Chart of I:DJI
DOW 16,058.35 -469.68 -2.84%
S&P 500 1,913.85 -58.33 -2.96%
NASDAQ 4,636.1050 -140.4030 -2.94%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs