Commodities have sold off. You already knew that. What has been seen in the precious metals complex looks a lot like what happened in the oil boom of 2007 to 2008, and many of the underlying stocks have acted in a similar fashion. We have taken a look at some of the key gold issues out there to see if the moves have been exaggerated and to see if some of these may even be oversold. It turns out that gold is only down about 5% and some of the gold miners, producers, and explorers did not really participate in the last leg of the gold rally before the commodity carpet was yanked out from under everyone.
Market Vectors Gold Miners ETF (NYSE: GDX) closed at $54.47 on Monday, up 0.5%, and the 52-week range is $45.88 to $64.62. Shares are up 18.72% from the low and down 15.71% from the high.
Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) closed at $34.70 on Monday, up only $0.01 on the day, and the 52-week range is $24.25 to $44.86. Shares are still up about 40% from the low but shares are down 22.65% from its high.
When it comes to bullion as a last example, the biggest and best is the SPDR Gold Trust (NYSE: GLD). It closed at $145.37 on Monday after losing 0.2%. The 52-week range is $113.08 to $153.61. The ETF is up 28.55% from the lows of the last year but is down only 5.36% from the highs. Now you know why investors flocked to the real metal rather than in the players of the metal… No tracking risk, at least that is the hope.
Agnico-Eagle Mines Ltd. (NYSE: AEM) closed at $61.61, down $0.35 on Monday. The consensus price target from Thomson Reuters is currently $85.23 and the 52-week range is $54.12 to $88.20. The company is also still one of the larger gold players with a $10.4 billion market cap. Shares are up almost 14% from the lows but still down about 30% from the highs.
Kinross Gold Corporation (NYSE: KGC) closed at $14.27, after a $0.03 gain on Monday. Thomson Reuters has a consensus price target of $22.68 and the 52-week range is $13.84 to $19.90. This is also one of the larger gold players with a $16 billion market cap. Shares are only about 3% off the 52-week lows and are down about 28% from the highs of the last year.
Compania de Minas Buenaventura SA (NYSE: BVN) in Peru closed at $39.16 on Monday, Thomson Reuters has an average analyst target of $52.68, and the 52-week range is $32.81 to $57.20. With a market cap of just under $10 billion, shares are still up almost 20% from the lows and down over 31% from the highs.
Golden Star Resources, Ltd. (NYSE: GSS) is one of the smaller companies in our universe of gold players with a $667 million market cap. Shares closed at $2.58 Monday and the 52-week range is $2.58 to $6.01. Thomson Reuters has an estimate of $4.05 although we’d treat that loosely due to its size. Shares are basically at 52-week lows now, but the stock has fallen 57% from its highs. This peaked last November and has been falling ever since.
Jaguar Mining Inc. (NYSE: JAG) closed at $4.31, up $0.04 on Monday, and this is also a much smaller player with a market cap of about $363 million. Thomson Reuters has an average price target of $8.11 on this one and the 52-week range is $4.11 to $10.60. Shares are only up 5% from its 52-week lows, but they are still down almost 60% from the peak. Realistically, Jaguar has been dropping since the middle of last summer.
Exeter Resource Corporation (AMEX: XRA) closed at $4.53, up $0.03 on Monday. The market cap is small at just under $400 million and its 52-week range is $4.50 to $7.92. The stock is right at 52-week lows and is down over 40% from the 52-week high. Exeter has been falling since early last summer.
Picking a bottom in some of these names is close to impossible because of the issues that have been driving them down individually plus the commodities markets having an impact. In others, picking a bottom is simple if you know exactly where the bottom in gold (and silver) happens to be.
If you think the move has been exaggerated in gold, the one in silver put it to shame. Still, those shares have been far more volatile than gold shares and that is for another session.
JON C. OGG