Gold miner rally to continue, RBC says


Yesterday's hawkish Fed guidance has the potential to dampen gold mining stocks (GDX) but RBC Capital expects continued outperformance; sentiment has changed, and investors have become more constructive on precious metals and precious metal equities.

The firm likes the sector's improving fundamentals, historically low earnings multiples, significant operational and financial leverage, as well as rerating potential given the industry’s focus to cut costs, boost margins and deliver free cash flow.

RBC prefers “higher quality names,” including Barrick Gold (ABX +0.7%), Goldcorp (GG +0.3%) and Yamana Gold (AUY -0.2%); while companies with higher relative cash costs and/or debt levels may initially outperform their lower cost, more financially sound peers, quality stocks provide the potential for greater long-term risk-adjusted returns and reduced potential for ongoing margin erosion.

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Comments (3)
  • goldy1asb
    , contributor
    Comments (39) | Send Message
     
    RBC analyst and team explain Why investors can expect continued outperformance from gold miners: Gurus have been attracted to the part given generally low profit products, noteworthy operational and monetary power, and in addition rerating potential given the industry's center to rein in expenses, support edges and convey free money stream.

     

    Year-to-date, the Gold Miners Index (GDX) is up 20% (USD terms), out-pacing gold and the more extensive value markets. We accept the biggest patron has been inflows from quality and contrarian gurus and also reestablished enthusiasm from generalist gurus. With gold having taken introductory decreasing steps in stride, moguls have ended up additional productive on valuable metals and valuable metal values. Here's a link related to this article http://on.barrons.com/...
    20 Mar 2014, 09:29 PM Reply Like
  • sheeple123jump
    , contributor
    Comments (407) | Send Message
     
    "....Miners Rally to continue ??...... wanna bet ?
    you mean, like its a free market, and miners are all,you know, like, undervalued, and theyre all just finally going to keep going back up....kinda like spot gold, which has plummeted straight down this week from 1392 to 1320 with hardly a pause.... you mean like that kind of 'rally' momentum?

     

    I dunno...... but I'll be curious to see where the summer bottoms are this year.
    last year's were kinda low,huh.....
    21 Mar 2014, 01:51 AM Reply Like
  • milo3131
    , contributor
    Comments (36) | Send Message
     
    Goldman just confirmed "their outlook" for Gold:

     

    Goldman's foolish predictions - first on December and January 2014: Golds will plunge to $1000...and early today 3 hours ago again trying to stop the Gold rally (at $1342 Goldman came up with this non-sense: Here it is again "confirming" the $1000 price target...

     

    Those bastards are trying purposely to manipulate the Gold market and to send prices lower and help the dollar. They have no chance, now is the time to buy Gold after this correction, cheers. There is no real recovery here. All numbers are just made up and later always adjusted. Unemployment figures do not take into account the real number of people without jobs this % is above 12%...Unless we change the entire financial system from debt based economy with 17 trillion USD in debt, and centralizing federal reserve on top of it to something better that would enable us to have real budget, pay off debts, and keep NO fiscal deficit, I do not see how this entire ship would survive...Goldman's "recovery" process is delusional and manipulative. We are just prolonging the end by printing billions of dollars per month and keep this sick financial system in place...This whole thing is going to burst BIG time one day. WE HAVE TO BE PREPARED BY HOLDING PHYSICAL GOLD in our hands:)
    21 Mar 2014, 03:48 PM Reply Like
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