24/7 Wall St. » NEM

After The Fall, Huge Upside & Value In Gold/Silver Miners (GDX, SIL, ABX, GG, NEM, AU, KGC, AEM, GFI, AUY, IAG, HMY, EGO, RGLD, SLW, PAAS)

Administrator — Tue, 22 May 2012 14:44:10 +0000

Gold and silver have finally indicated that the free fall we saw over the last month may have at least stabilized. The markets are mixed today in the commodities and the miners and we admit that no one truly knows what is the bottom-dollar that these can hit and no one knows the real top-dollar that investors will pay in a rally. What we do know is that the sell-off has literally gutted many of the key players in gold and silver and there is huge upside and value here if the consensus analyst price targets for one year from now are anywhere near correct.

At issue may be a stock market stabilization, or perhaps it is a stabilization aimed solely at the commodities and those companies which profit from either the rise of commodity prices or the rise of the demand for those commodities. It was just yesterday evening that Dennis Gartman of the Gartman Letter was talking up gold miners as his method of choice to play the current bounce in gold.

To show just how much implied upside there is we found some large cap gold stocks that have upside of about 100% and many of the big players have implied upside of well over 50%. The key ETFs for these miners show just how widespread the damage was during the last sell-off. The Market Vectors Gold Miners ETF (AMEX: GDX) trades at $43.35 against a 52-week trading range of $39.08 to $66.98 and that is down about 35% as a group from the highs. The Global X Silver Miners ETF (AMEX: SIL) trades at $18.00 against a 52-week range of $16.54 to $29.05 and that is down almost 38% from its high in the last year.

We included the implied dividend yields but due to foreign issues and ADRs causing currency translations and due to some payouts not being quarter like U.S. companies do, we would urge you to only consider the dividend as a footnote and something you should be verifying on your own. Besides that, who buys gold (and silver) miners because of their dividend yields only?

We have evaluated the following large-cap gold stocks: Barrick Gold Corporation (NYSE: ABX); Goldcorp Inc. (NYSE: GG); Newmont Mining Corp. (NYSE: NEM); AngloGold Ashanti Ltd. (NYSE: AU); Kinross Gold Corporation (NYSE: KGC); Agnico-Eagle Mines Ltd. (NYSE: AEM); Gold Fields Ltd. (NYSE: GFI); Yamana Gold, Inc. (NYSE: AUY); IAMGOLD Corp. (NYSE: IAG); Harmony Gold Mining Co. Ltd. (NYSE: HMY); Eldorado Gold Corp. (NYSE: EGO); and Royal Gold, Inc. (NASDAQ: RGLD). We have covered also two of the larger silver players of Silver Wheaton Corp. (NYSE: SLW) and Pan American Silver Corp. (NASDAQ: PAAS).

Barrick Gold Corporation (NYSE: ABX) traded at $37.60 and has a market value of $37.6 billion. The consensus target price from Thomson Reuters is $59.10 and the 52-week range is $34.82 to $55.95. Barrick has a dividend yield of 2.2%. The implied upside to the consensus target: 57% but we would note that the target is above the 52-week high.

Goldcorp Inc. (NYSE: GG) traded at $34.90 with a market value of $28.2 billion. The consensus target price from Thomson Reuters is $60.42 and the 52-week trading range is $32.16 to $56.31. Goldcorp’s most recent yield was listed as 1.6%. The implied upside to the consensus target is 73% but we would note that the consensus target is still above the 52-week high.

Filed under: ADR, Commodities, Corporate Governance, ETF, Metals, Trading Alert, Value Investing Tagged: ABX, AEM, AU, AUY, EGO, GDX, GFI, GG, HMY, IAG, KGC, NEM, PAAS, RGLD, SIL, SLW

Royal Gold’s Reserves Grow Even as Results Lag (RGLD, ABX, KGC, NEM, GG, PAAS, GLD)

Paul Ausick — Thu, 03 May 2012 14:00:30 +0000

For those who believe that the price of gold is going to rise, Royal Gold Inc. (NASDAQ: RGLD) may be worth another look. Shares are essentially flat over the past 12 months, but the company’s results have been outstanding even though they slightly missed estimates for the company’s third fiscal quarter.

The company owns shares of production in mines operated by Barrick Gold Corp. (NYSE: ABX), Kinross Gold Corp. (NYSE: KGC), Newmont Mining Corp. (NYSE: NEM), Goldcorp Inc. (NYSE: GG), and Pan American Silver Corp. (NASDAQ: PAAS) among many others. The company gets a portion of production without the impact of rising costs on production, costs which have bedeviled the miners for some time now.

For the company’s third quarter EPS came in at $0.44 versus a consensus estimate of $0.45. Revenues rose to $69.6 million, compared with an estimate of $69 million. Royal Gold also reported an increase in its gold reserves this morning, from a previous total of 83.9 million ounces of gold and 12.4 billion ounces of silver to 84.5 million ounces of gold and 1.2 billion ounces of silver.

After applying the company’s royalty participation formula, Royal Gold claims its precious metals reserves increased 19% on a gold equivalent basis from December 2010 to December 2011.

The consensus estimate for 2012 EPS is $1.83, growing to $2.32 in 2013. The company’s dividend yield is just 1%, and an increase to the annual $0.15/share dividend would probably help the stock more than another gold strike.

Compared with the SPDR Gold Shares ETF (AMEX: GLD), Royal Gold comes up a little short, with five-year share-price growth of 101% compared with growth of 138% for the ETF.

Royal Gold’s shares hit an all-time high last September near $84 and it’s trading today at $59.65, down about -2.3% from last night’s close. The 52-week range is $55.00-$83.87. Year-to-date shares are down -11.6%, even after a jump above $75/share following a January at-the-market purchase of 4 million shares by Goldman Sachs. Shares could be available at a bargain price real soon now.

Paul Ausick

Filed under: Commodities, Earnings, Metals Tagged: ABX, GG, GLD, KGC, NEM, PAAS, RGLD

Gold Miners in Flux (ABX, GG, NEM, KGC, AUY, FCX)

Paul Ausick — Wed, 02 May 2012 13:37:43 +0000

Gold has been trading in a fairly narrow range between $1,600-$1,700/ounce for the past two months after ending 2011 at around $1,525/ounce. Gold prices spiked to near $1,800/ounce in February, but none of this has helped gold mining stocks which are down anywhere from -20% to around -45% for the past 12 months.

Barrick Gold Corp. (NYSE: ABX), which reported quarterly results this morning, is just the latest casualty in the gold mining business. Goldcorp Inc. (NYSE: GG) missed estimates by a modest amount, and Newmont Mining Co. (NYSE: NEM) reported a modest beat for the quarter. Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) beat EPS estimates by nearly 12%, the best showing of the bunch so far. Yamana Gold Inc. (NYSE: AUY) missed estimates yesterday, and Kinross Gold Corp. (NYSE: KGC) won’t report first quarter results until next week.

Demand for bullion, from central banks and investment instruments like the SPDR Gold Shares ETF (AMEX: GLD) are driving the price of gold, but not driving it to great new highs. Equity markets have been strong in the first quarter of the year, and investors have been chasing returns rather than seeking the safe haven of gold.

For the miners themselves, costs are the constraint. Barrick, for example, realized an average gold price of $1,691/ounce in the first quarter, up from $1,389/ounce in the same period a year ago, an increase of more than 21%. Cash costs rose from $437/ounce a year ago to $545/ounce in the first quarter, more than 24%. Total production costs rose from $595 to $737 per ounce, a jump of nearly 24%.

Barrick reported total cash margin on gold of $1,146/ounce, while Goldcorp reported total cash margin of $1,456/ounce. Labor and regulatory issues contribute to higher costs, as do less productive ores. Then there are the rising costs of new exploration and development.

If investors continue to flock to equity markets, only central banks and jewelry makers are left to push demand for gold. That’s not a good position for the miners to be in.

Barrick’s announced a 33% increase in its quarterly dividend this morning, to $0.20/share. Goldcorp raised its quarterly dividend to $0.35/share earlier. Neither move will boost the dividend yield above 2% though — and even if it did, it probably wouldn’t be enough to lift the share prices much.

Barrick stock is down about -1.6% in the pre-market, at $39.80 in a 52-week range of $38.46-$55.95.

Paul Ausick

Filed under: Commodities, Earnings Tagged: ABX, AUY, FCX, GG, KGC, NEM

Top Analyst Upgrades & Downgrades (AAPL, CCL, CLNE, DFS, ESRX, GNC, GG, GRPN, KGC, NFLX, NEM, PM, SLB, TKR, URBN)

Administrator — Tue, 03 Apr 2012 12:03:02 +0000

These are some of the top analyst upgrades, downgrades, and initiations seen from Wall Street research calls this Tuesday.

Apple Inc. (NASDAQ: AAPL) Started as Buy at Auriga; target raised to $715 at JPMorgan

Carnival Corporation (NYSE: CCL) named as Bear of the Day at Zacks.

Clean Energy Fuels Corporation (NASDAQ: CLNE) Started as Neutral at Macquarie.

Discover Financial Services (NYSE: DFS) named as Bull of the Day at Zacks.

Express Scripts Inc. (NASDAQ: ESRX) Started as Overweight at JPMorgan.

GNC Holdings Inc. (NYSE: GNC) Raised to Outperform at BMO.

Goldcorp Inc. (NYSE: GG) Started as Neutral at Citigroup.

Groupon, Inc. (NASDAQ: GRPN) Started as Neutral at Stern Agee.

Kinross Gold Corporation (NYSE: KGC) Started as Buy at Citigroup.

Netflix, Inc. (NASDAQ: NFLX) Cut to Equal-weight at Barclays.

Newmont Mining Corporation (NYSE: NEM) Cut to Neutral at Citigroup.

Philip Morris International, Inc. (NYSE: PM) Cut to Neutral at Credit Suisse.

Schlumberger Limited (NYSE: SLB) Raised to Buy at Stern Agee.

The Timken Company (NYSE: TKR) named as Value stock of the day at Zacks.

Urban Outfitters Inc. (NASDAQ: URBN) Raised to Neutral at Citigroup.

If you enjoyed the top analyst upgrades and downgrades, you can join our free email newsletter that includes analyst summaries each morning sent right to your inbox. We also cover top issues such as IPOs, special financial exclusives, mergers and more. Sign up in the box below.

JON C. OGG

Filed under: Analyst Calls Tagged: AAPL, CCL, CLNE, DFS, ESRX, GG, GNC, GRPN, KGC, NEM, NFLX, PM, SLB, TKR, URBN

Are Gold Stocks a Bargain at 52-Week Lows? (GLD, ABX, NEM, GG, GDX)

Administrator — Thu, 15 Mar 2012 17:55:11 +0000

Gold is trying to recover on Thursday as it moves back and forth between being a risk-trade asset and an end of the world trade. While gold may be on the mend or at least trying to find some footing, it is impossible to not notice that the major gold stocks in many cases are down very close to their 52-week lows. Does this make the gold giants like Barrick Gold Corporation (NYSE: ABX), Goldcorp Incorporated (NYSE: GG), and Newmont Mining Corporation (NYSE: NEM) bargains? And what about the Market Vectors Gold Miners ETF (NYSE: GDX)? Maybe more is up to the charts than to fundamentals right now (see below).

Barrick Gold Corporation (NYSE: ABX) is up 1.2% at $43.84, but its 52-week trading range is $42.50 to $55.95. The market value is still almost $44 billion. Goldcorp Incorporated (NYSE: GG) is up only $0.03 at $44.48 but its 52-week trading range is $41.91 to $56.31. Goldcorp is still worth nearly $36 billion today. Newmont Mining Corporation (NYSE: NEM) is down around $54.15 after a $0.15 drop on Thursday and the 52-week trading range is $50.16 to $72.42. It is still worth more than $26 billion and it has a 2.6% dividend yield.

To show that these large players are not alone, the Market Vectors Gold Miners ETF (NYSE: GDX) is up 0.5% at $50.34 but the 52-week trading range is $49.22 to $66.98.

Gold itself is up almost 1% at $1658.90, but that is down from about $1,780 at the end of February and down from above $1,700.00 just last week. If you just look at gold via the SPDR Gold Trust (NYSE: GLD), it is up 1% at $161.30 and the 52-week range is $136.25 to $185.85. The “GLD” is at an important juncture on its chart if you take a look at the stockcharts.com chart below.

JON C. OGG

Filed under: ADR, Commodities, ETF, Luxury, Metals Tagged: ABX, GDX, GG, GLD, NEM

24/7 Wall St. Closing Bell (AAPL, NEM, DNDN, CHTR, APOL, COST, PCLN, HFC, AZO, CRZO, DPZ, ODP, SAFM, RDC, TECD, YRCW, ALIM, TBET, SUMR, PEIX, CECO)

Paul Ausick — Tue, 28 Feb 2012 21:14:49 +0000

Stocks started the day nearly flat before turning down on a poor report on US durable goods orders (more coverage here) and a slide in the Case-Shiller home price index (more coverage here). The Conference Board’s consumer confidence index came in much stronger than expected, however, and all the indexes had turned positive by mid-morning (more coverage here). The tech sector, led by Apple Inc. (NASDAQ: AAPL), which posted a new 52-week high over $543/share, carried the rest of the market higher. Crude oil was lower today, with WTI crude lower by -1.9% at $106.55/barrel and Brent crude down -1.92% at $121.79/barrel. Gold settled up 0.8% at $1,788.40/ounce, the yellow metal’s highest close since more than three months.

The unofficial closing bells put the DJIA up nearly 24 points to 13,005.12 (0.18%), the NASDAQ rose more than 20 points (0.69%) to 2,986.76, and the S&P 500 rose 0.34% or nearly 5 points to 1,372.18.

There were several analyst upgrades and downgrades today, including Newmont Mining Corp. (NYSE: NEM) cut to ‘hold’ at TD; Dendreon Corp. (NASDAQ: DNDN) maintained as ‘neutral’ but target price cut to $13 at Credit Suisse; Charter Communications (NASDAQ: CHTR) maintained as ‘outperform’ and target price raised from $60 to $74 at Credit Suisse; Apollo Group Inc. (NASDAQ: APOL) raised to ‘overweight’ at Barclays; and Costco Wholesale Corp. (NASDAQ: COST) started as ‘perform’ at Oppenheimer.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Priceline.com Inc. (NASDAQ: PCLN) is up nearly 7% at $632.78 after posting a new 52-week high of $637.88 earlier today (more coverage here); HollyFrontier Corp. (NYSE: HFC) is down -3.7% at $31.91 (more coverage here); Autozone Inc. (NYSE: AZO) is up 2.7% at $375.94 after posting a new 52-week high of $377.78; Carrizo Oil & Gas Inc. (NASDAQ: CRZO) is down -0.5% at $27.47; Domino’s Pizza Inc. (NYSE: DPZ) is up nearly 16% at $38.88 after posting a new 52-week high of $38.90 earlier today (more coverage here); Office Depot Inc. (NYSE: ODP) is up nearly 19% at $3.58; Sanderson Farms Inc. (NASDAQ: SAFM) is down -1.5% at $48.72; Rowan Companies Inc. (NYSE: RDC) is down -6% at $36.20; TechData Corp. (NASDAQ: TECD) is down -6.7% at $53.62; and YRC Worldwide Inc. (NASDAQ: YRCW) is down -13% at $10.31.

Other standouts from today include the following stocks:

Alimera Sciences Inc. (NASDAQ: ALIM) is up about 76% at $4.06. The eyecare drug maker received a positive outcome from a European regulatory body for its ILUVIEN treatment.

Tibet Pharmaceuticals Inc. (NASDAQ: TBET) is up 14% at $1.71. The drug maker is being taken private by its CEO and chairman for $3/share.

Summer Infant Inc. (NASDAQ: SUMR) is up nearly 25% at $5.98. The maker of branded juvenile products announced better than expected earnings this morning.

Pacific Ethanol Inc. (NASDAQ: PEIX) is down more than -26% at $1.19. The ethanol maker’s reported earnings fell short of expectations. More coverage here.

Career Education Corp. (NASDAQ: CECO) is down more than -18% at $9.17. The for-profit education company posted a weak earnings report this morning.

Stay tuned for Wednesday. Federal Reserve chairman Ben Bernanke, Dallas Fed president Richard Fisher, and Philadelphia Fed president Charles Plosser are giving speeches. We have noted the following events on the schedule (all times Eastern):

7:00 a.m. – Mortgage Bankers Association purchase applications
8:30 a.m. – US GDP
9:45 a.m. – Chicago PMI
10:30 a.m. – EIA weekly petroleum status report
2:00 p.m. – Federal Reserve Beige Book
3:00 p.m. – Farm prices

Paul Ausick

Filed under: 24/7 Wall St. Wire Tagged: AAPL, ALIM, APOL, AZO, CECO, CHTR, COST, CRZO, DNDN, DPZ, HFC, NEM, ODP, PCLN, PEIX, RDC, SAFM, SUMR, TBET, TECD, YRCW

Top Analyst Upgrades & Downgrades (APOL, CHTR, COST, DNDN, RAIL, GPC, GMCR, HST, INFY, NEM, NOK, PCLN, TTM, USG, WSH)

Administrator — Tue, 28 Feb 2012 13:15:06 +0000

These are some of this Tuesday’s top analyst upgrades, downgrades, and initiations seen in Wall Street research calls.

Apollo Group Inc. (NASDAQ: APOL) Raised to Overweight at Barclays.
Charter Communications (NASDAQ: CHTR) Maintained Outperform but raised target to $74 from $60 at Credit Suisse.
Costco Wholesale Corp. (NASDAQ: COST) Started as Perform at Oppenheimer.
Dendreon Corporation (NASDAQ: DNDN) Maintained Neutral but cut target to $13 at Credit Suisse.
FreightCar America, Inc. (NASDAQ: RAIL) named as Value Stock of the Day at Zacks.
Genuine Parts Co. (NYSE: GPC) Cut to Hold at Argus.
Green Mountain Coffee Roasters (NASDAQ: GMCR) named as Bull of the Day at Zacks.
Host Hotels & Resorts Inc. (NYSE: HST) Cut to Hold at Argus.
Infosys Limited (NASDAQ: INFY) Cut to Neutral at Janney.
Newmont Mining Corp. (NYSE: NEM) Cut to Hold at TD.
Nokia Corporation (NYSE: NOK) Cut to Underperform at Oppenheimer.
priceline.com Inc. (NASDAQ: PCLN) Reiterated Outperform and raised target to $790 from $710 at Credit Suisse.
Tata Motors Ltd. (NYSE: TTM) Started as Overweight at Morgan Stanley.
USG Corporation (NYSE: USG) Raised to Overweight at JPMorgan.
Willis Group Holdings, Plc (NYSE: WSH) named as Bear of the Day at Zacks.

If you enjoyed the top analyst calls of the week, you can join our free email newsletter that includes analyst summaries each morning sent right to your inbox. We also cover top issues such as IPOs, special financial exclusives, mergers and more. Sign up in the box below.

JON C. OGG

Filed under: 24/7 Wall St. Wire, Analyst Calls Tagged: APOL, CHTR, COST, DNDN, GMCR, GPC, HST, INFY, NEM, NOK, PCLN, RAIL, TTM, USG, WSH

24/7 Wall St. Closing Bell (FSLR, MNST, TSL, ARMH, MAR, Y, CROX, DECK, MRVL, MCP, SPN, ANR, JCP, NEM, CHTP, BV, KCP, RBCN, KND)

Paul Ausick — Fri, 24 Feb 2012 21:08:15 +0000

After opening higher this morning, markets rebounded from an early dip following a better-than-expected reading on consumer confidence and a bullish report on US new home sales. But sellers took over in the afternoon and the three major indexes turned south, with the DJIA falling into negative territory for the day. Crude oil continues to set new multi-month highs, with WTI ending up 1.8% for the day at $109.77/barrel, and a gain for the week of 6.3%. Brent crude is up 1.42% at $125.37/barrel. Gold settled down -0.6% at $1,776.40/ounce, but posted a weekly gain of 2.9%.

The unofficial closing bells put the DJIA down nearly 2 points to 12,983.02 (-0.01%), the NASDAQ rose more than 6 points (0.23%) to 2,963.75, and the S&P 500 rose 0.17% or more than 2 points to 1,365.74.

There were several analyst upgrades and downgrades today, including First Solar Inc. (NASDAQ: FSLR) cut to ‘neutral’ at Susquehanna; Monster Beverage Corp. (NASDAQ: MNST) reiterated as ‘Conviction Buy List’ and estimates raised at Goldman Sachs; Trina Solar Ltd. (NYSE: TSL) cut to ‘market perform’ at Wells Fargo and cut to ‘negative’ at Susquehanna; ARM Holdings plc (NASDAQ: ARMH) started as ‘overweight’ at Piper Jaffray; and Marriott International Inc. (NYSE: MAR) raised to ‘Conviction Buy List” at Goldman Sachs.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Allegheny Corp. (NYSE: Y) is up 4.4% at $315.72; Crocs Inc. (NASDAQ: CROX) is down -5.8% at $19.24 (more coverage here); Deckers Outdoor Corp. (NASDAQ: DECK) is down -14.2% at $77.39; Marvel Technology Group Ltd. (NASDAQ: MRVL) is down -3.7% at $15.46; Molycorp Inc. (NYSE: MCP) is down -7.9% at $26.80 (more coverage here); Superior Energy Services Inc. (NYSE: SPN) is down -1.8% at $29.92; Alpha Natural Resources Inc. (NYSE: ANR) is down -2.9% at $20.40 (more coverage here); J.C. Penney Co. Inc. (NYSE: JCP) is down -0.72% at $41.63; and Newmont Mining Corp. (NYSE: NEM) is down -2.3% at $62.32.

Other standouts from today include the following stocks:

Chelsea Therapeutics International Inc. (NASDAQ: CHTP) is up 61% at $3.88. The drug maker yesterday received an FDA panel approval for a drug to treat symptoms of Parkinson’s disease.

Bazaarvoice Inc. (NASDAQ: BV) is up about 37% at $16.40. Today is the social commerce site’s IPO and trading volume has topped 8.1 million on an original issue of about 9.5 million shares at $12/share. More coverage here and here.

Kenneth Cole Productions Inc. (NYSE: KCP) is up about 19% at $15.55 after posting a new 52-week high of $16.00 earlier. The apparel maker is being taken private at $15/share. More coverage here.

Rubicon Technology Inc. (NASDAQ: RBCN) is down nearly -19% at $9.87. The LED maker missed estimates and offered weak guidance for the current quarter.

Kindred Healthcare Inc. (NYSE: KND) is down nearly -15% at $10.66. The healthcare services company posted a loss last night and announced that it would not renew 7 of 10 master leases with Ventas Inc. (NYSE: VTR).

Stay tuned for Monday. We have noted the following events on the schedule (all times Eastern):

10:00 a.m. – Pending home sales index
10:30 a.m. – Dallas Fed manufacturing survey
11:30 a.m. – 3- and 6-month Treasury bill auction

Have a great weekend!

Paul Ausick

Filed under: 24/7 Wall St. Wire Tagged: ANR, ARMH, BV, CHTP, CROX, DECK, FSLR, JCP, KCP, KND, MAR, MCP, MNST, MRVL, NEM, RBCN, SPN, TSL, Y

Upside is Scarce in Metals and Materials Stocks (X, NUE, STLD, NEM, ABX, SLW, FCX, SCCO, AA, MCP)

Paul Ausick — Thu, 23 Feb 2012 16:50:29 +0000

The metals and materials sector, including miners, has been hit hard by the weaker global economy. China’s manufacturing slowdown, the turmoil in Europe, and slow growth in the US have caused prices to fall even as expenses rise. All but three of the companies in this survey have had their target prices lowered in the past three months, a further signal that weaker revenues and profits may be in store for 2012.

The companies we examined were United States Steel Corp. (NYSE: X), Nucor Corp. (NYSE: NUE), Steel Dynamics Inc. (NASDAQ: STLD), Newmont Mining Corp. (NYSE: NEM), Barrick Gold Corp. (NYSE: ABX), Silver Wheaton Corp. (NYSE: SLW), Freeport-McMoran Copper & Gold Inc. (NYSE: FCX), Southern Copper Corp. (NYSE: SCCO), Alcoa Inc. (NYSE: AA), and Molycorp, Inc. (NYSE: MCP).

Since November, gold prices have gained about 3%. Silver prices are essentially flat, and copper prices are up by about 5%. Titanium prices are about 6% lower, steel prices have been falling and are now about 7% lower than in November, and rare earth minerals exports from China were below expected levels in 2011, causing a price drop in the latter part of the year. Chinese production projections for 2012 are roughly equal to the 2011 production quota of 31,000 metric tons.

Newmont’s consensus target price has fallen from $81 in November to $77.92. At a current price this morning of $62.98, Newmont’s implied gain is 23.7%. Since the beginning of the year, the stock has gained more than 5%, with a 12-month share price gain of about 6.8%. The company raised its quarterly dividend to $0.35, a jump of 133%, following a pledge to raise dividends if gold price targets were met. The company’s dividend yield is now 2.3%.

Barrick’s target price has also been cut, from $68 to $64.72. At its current price of $49.62, Barrick’s implied gain is 30.4%. Year-to-date shares are up about 9.6%, but for the preceding 12 months, Barrick’s stock is down 5.6%. Shares are trading at less than 6% away from the 52-week high of $55.95. Over the past month, Barrick’s shares have gained 12%.

Molycorp’s target price fell from $70 to $52.83. At a current price of $28.68, the potential upside is a whopping 84%. Molycorp’s shares have lost about 38% in the past 12 months, though since January shares have risen about 20%. The company is expected to report EPS of $0.41 on revenue of about $135 million after markets close today. The company has begun a phased launch of its new manufacturing facility and expects to produce 19,050 metric tons of oxides by the end of the third quarter. That would be good news if prices weren’t falling.

US Steel’s target price remained nearly flat from November’s $34.50 to today’s $35.21. At the current price of $28.19, the implied gain is 24.9%. Falling steel prices in the fourth quarter hurt all steel makers. Global crude steel production grew 6.8% in 2011, which combined with a slower growing economy depressed prices. Global production was down -7.8% year-over-year in January, which could herald a comeback in pricing.

Nucor’s target price has risen from about $45 to $48 since November. At the current share price of $43.44, the potential upside is 10%. Two recent analyst downgrades have chopped share price gains, but Nucor’s stock is still up nearly 10% since January.

Freeport-McMoran’s target price actually rose from$53 to $55.28 in the last three months. At the current share price of $43.89, the potential upside for the stock is 26%. Freeport had a lousy fourth quarter, due mainly to labor strife in Australia. Slowly rising copper prices should help, but production may have to be reined in to keep prices moving up.

Silver Wheaton’s consensus target price fell from $49.50 to $47.80, while the share price has gained more than 26% in three months. At the current share price of $39.29, the implied gain here is 21.7%. Silver prices are roughly flat since November, and unless they improve, Silver Wheaton’s share price won’t either.

Alcoa’s target price has dropped from $13 to $11.53 since November. At the current price of $10.46, the implied gain in Alcoa stock is about 10%. Alcoa appears to have little attraction at its current share price, which is more likely to suffer than prosper from a glut of aluminum.

The target price for Steel Dynamics has risen from $16 to $18 in the past three months. At the current price of $14.75, the implied gain in the stock is 22%. As with US Steel, whether or not Steel Dynamics has a chance to add value depends on demand for steel and what that will do to prices if production continues to grow.

Southern Copper’s target price hjas fallen from $36.25 to $35.58. At the current price of $33.45, the implied gain for Southern Copper is 6.4%. The only thing that will boost Southern is a rise in copper prices.

The underlying softness in commodity prices makes any play other than gold a risky choice. Newmont and Barrick, the two gold producers in this bunch, offer significant upside potential, and rising gold prices should help, provided the miners can keep costs under control.

Paul Ausick

Filed under: 24/7 Wall St. Wire, Commodities, Metals Tagged: AA, ABX, FCX, MCP, NEM, NUE, SCCO, SLW, STLD, X

24/7 Wall St. Closing Bell (C, NEM, STX, XOM, MWW, AMZN, BRCM, AET, COCO, EPD, MAN, MPC, NOC, WHR, KTCC, SGMO, MDVN, JDAS, IXYS)

Paul Ausick — Wed, 01 Feb 2012 21:04:57 +0000

The three major US stock indexes opened higher this morning, following on a positive debt sale by Portugal and some improvement in PMI numbers from Europe. ADP employment data did not meet expectations, but did not pull stocks down. ISM data fell a bit short of expectations, but construction spending rose sharply. In Asia, China posted mixed PMI reports and the country’s data on new loans was lower than expected. US oil and gasoline inventories rose more than expected, put a crimp in energy prices that had started our higher for the day (more coverage here). WTI crude finished the day down -0.9% at $97.61/barrel, its lowest level in six weeks. Brent crude rose 0.71% to $111.77/barrel. Gold closed up 0.41% at $1,747.60.

The unofficial closing bells put the DJIA up more than 83 points to 12,716.31 (0.66%), the NASDAQ rose more than 34 points (1.22%) to 2,848.27, and the S&P 500 rose 0.89% or nearly 12 points to 1,324.08.

There were several analyst upgrades and downgrades today, including Citigroup Inc. (NYSE: C) raised to ‘outperform’ at Wells Fargo; Newmont Mining Corp. (NYSE: NEM) cut to ‘hold’ at Stifel Nicolaus; Seagate Technology PLC (NASDAQ: STX) raised to ‘buy’ at Stifel Nicolaus; Exxon Mobil Corp. (NYSE: XOM) cut to ‘hold’ at Argus (see our coverage here); and Monster Worldwide Inc. (NYSE: MWW) cut to ‘perform at Oppenheimer. Amazon.com (NASDAQ: AMZN) had three ratings changes today: maintained as ‘neutral’ with target price cut to $190 at Credit Suisse; maintained ‘outperform’ but estimates cut at Baird; and target price lowered to $225 at Jefferies.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Amazon.com is down -8.2% at $178.51; Broadcom Corp. (NASDAQ: BRCM) is up 8.24% at $37.18; Aetna Inc. (NYSE: AET) is up 3.3% at $45.13; Corinthian Colleges Inc. (NASDAQ: COCO) is up nearly 34% at $4.05; Enterprise Products Partners L.P. (NYSE: EPD) is up 3.8% at $50.13, after posting a new 52-week high of $50.35 earlier today; Manpower Inc. (NYSE: MAN) is up nearly 14% at $45.70; Marathon Petroleum Corp. (NYSE: MPC) is up nearly 10% at $41.98; Northrup Grumman Corp. (NYSE: NOC) is up 2.22% at $59.34; and Whirlpool Corp. (NYSE: WHR) is up 14% at $61.93.

Other standouts from today include the following stocks:

Key Tronic Corp. (NASDAQ: KTCC) is up nearly 37% at $8.53, after posting a new 52-week high of $8.74 earlier today. The computer peripherals maker posted better-than-expected earnings and revenues after markets closed last night.

Sangamo BioSciences Inc. (NASDAQ: SGMO) is up more than 21% at $4.19. The pharmaceutical maker has announced a collaboration with Shire plc (NASDAQ: SHPGY) to develop a hemophilia treatment.

Medivation Inc. (NASDAQ: MDVN) is up more than 21% at $67.26, after posting a new 52-week high of $70.87 earlier today. The development stage drug maker has reported highly positive results on a test of its late-stage prostate cancer treatment. We have more coverage here.

JDA Software Group Inc. (NASDAQ: JDAS) is down more than -17% at $24.39. The software maker issued a fairly weak quarterly report and continuing investor wariness remains over an SEC investigation of the company’s accounting practices.

IXYS Corp. (NASDAQ: IXYS) is down more than 14% at $11.76. The integrated circuit maker posted poor quarterly numbers after markets closed last night.

Stay tuned for Thursday. Federal Reserve chairman Ben Bernanke is speaking at 10:00 a.m. and Dallas Fed president Richard Fisher is speaking in the evening. We have noted the following events on the schedule (all times Eastern):

7:30 a.m. – Challenger Job-cut data
8:30 a.m. – New claims for unemployment benefits
10:30 a.m. – EIA weekly natural gas storage report
4:30 p.m. – Federal Reserve money supply and balance sheet reports

Paul Ausick

Filed under: 24/7 Wall St. Wire Tagged: AET, AMZN, BRCM, C, COCO, EPD, IXYS, JDAS, KTCC, MAN, MDVN, MPC, MWW, NEM, NOC, SGMO, STX, WHR, XOM