Newmont Mining by Alan Abelson
Highlighted companies: Newmont Mining Corp. (NEM)
Summary: The bullish case for Newmont Mining Corp. (NEM): Newmont is the only pure gold stock in the S&P 500 index. It has a market cap of $23B, and a first-rate global property portfolio. It continues to discover gold at a faster rate than it mines it. It boasts a rock-solid balance sheet, an exceptional investment portfolio, great cash flow, and competent management. Presently the company has been hurt by a drought in Ghana that forced it to reduce its operations there, and being kicked out of Uzbekistan. Its shares currently linger in the low 40s after hitting as high as $63, as gold itself dawdles in the high 500s, down from its $715 May high. Depending on your calculations, Newmont's net assets are worth 20-50% more than its share price. Shares currently trade at 2003 prices, despite a 50% gain in the price of gold. And most analysts rate it as a Hold or Sell. All this has Barron's and other pundit thinking that any future surprises, at this stage, will only be to the upside.
Quick comment: Some recent Seeking Alpha commentary on Newmont: Ten Predictions for After the Upcoming Mid-Term Elections • Where Is Newmont Mining Headed? • Gold Vs. Copper: Leaders and Laggards • Gold Miner Stocks Making Bold Moves • Gold — Don't Be Left Holding the Bag • Newmont Mining Trading as if Gold at $538 Per Ounce, Not $700 • Abandoning Gold Mining Stocks for an ETF • ETFs with a significant holding in Newmont: Market Vectors Gold Miners ETF (GDX), Vanguard Materials VIPERs (VAW), Materials Select Sector SPDR (XLB), iShares Dow Jones US Basic Materials (IYM), SPDR Metals and Mining ETF (XME) • Newmont announces earnings on Wednesday, Nov. 1, look for its earnings conference call transcript