For Gold Miners A Huge Week Ahead

| About: VanEck Vectors (GDX)

Summary

Investors in gold miners have a huge week ahead.

Many major gold miners are reporting earnings.

The reports are likely to set a tone for the entire sector and serve as a weighty catalyst this week.

Actual earnings results should be positive, due to a positive trend for gold prices into the quarter end.

However, guidance from miners might be deflating given the price declines in gold and silver since September end.

I regularly discuss the impact I see from various issues and factors on the prices of precious metals, which in turn play a critical role in the price movement of gold and silver miners' shares. But this week presents a very critical, immediate and direct catalyst for gold miner shares that you should be aware of.

VanEck Vectors Gold Miners ETF stock chart

GDX Chart at Seeking Alpha

Earnings Reports will Influence Tone

The week ahead presents the earnings reports of several components of the VanEck Vectors Gold Miners ETF (NYSE: GDX), including some of the most significant gold miners on the market. The earnings results of these companies should play importantly for the shares of gold miners broadly and thus influence to some degree the movement of the GDX and also the VanEck Vectors Junior Gold Miners ETF (NYSE: GDXJ).

Gold prices were steady to rising through the quarter ended in September, as indicated by rising EPS estimates through the quarter. Thus, the earnings results of the miners should be enthusing. However, because of a recent decline in the price of gold since quarter-end, corporate earnings guidance moving forward could be disappointing for the sector.

The Earnings Schedule

Precious Metal Securities

Consensus Estimate

Last Quarter

Performance

Last 4 Qs

90 Day

Est. Trend

WEDNESDAY

Newmont Mining (NYSE: NEM)

$0.52

Beat +47%

Beat 3 of 4

Increased

Goldcorp (NYSE: GG)

$0.12

Miss 3 Cents

Miss 3 of 4

Increased

Agnico Eagle Mines Ltd. (NYSE: AEM)

$0.20

Beat +60%

Beat 4 of 4

Increasing

Barrick Resources (NYSE: ABX)

$0.21

In Line

Beat 3 of 4

Increased

Coeur Mining (NYSE: CDE)

$0.15

Beat 14 Cents

Beat 3 of 4

Increasing

THURSDAY

Yamana Gold (NYSE: AUY)

$0.04

Miss 1 Cent

Beat 1 of 4

Unchanged

New Gold (NYSE: NGD)

$0.03

Beat 3 Cents

Beat 1 of 4

Increasing

Eldorado Gold (NYSE: EGO)

$0.03

Beat 1 Cent

Beat 2 of 4

Increased

Click to enlarge

The Company Specific Data

The table here allows investors to compare a sampling of earnings relative data I view helpful. You may see slightly different EPS estimates from various sources. Given my comfort with its accuracy through my vetting of it as an analyst, I used data from Yahoo here, which is sourced from various credible providers of data. However, I compared the estimates to data from Zacks Investment Research and that provided at MarketWatch.com, and in most instances variances were slight. In the case of Coeur Mining, the variance was significantly greater ($0.15 at Yahoo vs. $0.10 at Zacks). I went with Yahoo because I noted it had been updated regularly and had increased from about $0.10 90 days ago.

The other columns provide data I view relevant toward getting an idea or thumbnail sketch of how a company is performing. However, in the case of gold miners, the reliability of historical indicators will highly likely depend on changes in the price of the commodity produced (NASDAQ:GOLD) during the quarter being measured. So just because a miner beat estimates through most of the year might not mean it will do so again this quarter if gold prices were rising previously but declined in the current reporting period. Obviously, the degree of price hedging and ability to manage costs variably will matter as well in these instances per company.

In the third column, in some instances I use cents and in other cases percentages. I determined which to use based on what I viewed most relevant. In the case of a cent figure, the percentage term was likely extremely large and might have misled the reader when the change in cents was actually minute. In cases where I used percentages, the cents figure was likely large enough for me to feel comfortable talking to you in terms of percentages.

In the final column, you'll note that in some instances I wrote "increasing" versus "increased." I did so in order to note for myself that estimates in the case of the "increasing" seemed to be increasing throughout the quarter, and not just from 90 days ago, when the company last gave EPS guidance. This could prove more relevant toward a good earnings report prognostication.

In my view, the data here is not enough in isolation to make a judgment call about a company. Investors should thoroughly research companies before making investments, including knowing the intimate details of its operations and its current efforts. That knowledge is garnered through study of SEC filings, analysis of financial statements, listening to conference calls, talking to management etc. However, if you are already intimately familiar with a stock or two noted here, this may help you toward a higher level of comfort (or not) heading into the week.

I intend to get to know many of the gold and silver miners intimately over coming quarters so that I may be a full service provider of analysis to this sector of investment. Still, just based on the data I looked at here, Agnico Eagle Mines stuck out as the name I want to look at first.

I intend this week to provide both in-depth individual earnings previews and post EPS report analysis for several gold miners that are reporting earnings this week. Interested investors can receive those in their email or on their Seeking Alpha feeds by clicking here(my financial column) and following my column here at Seeking Alpha.

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.