Seeking Alpha

Goldman upgrades precious metals miners, Barrick Gold upped to Buy

  • Gold and silver equities now appear more fairly valued, Goldman Sachs says, raising its sector coverage view to Neutral as it sees more responsible capital allocation, successful cost cutting initiatives, a refocus on maximizing free cash flow, and sound strategic portfolio optimization improving the positioning of select companies and offsetting its below-consensus outlook for commodity prices ($1,200/oz. gold from 2015 forward).
  • The firm upgrades Barrick Gold (ABX) to Buy, believing the company's financial flexibility has significantly improved; ABX +1.8% premarket.
  • B2Gold (BTG) is initiated with a Buy rating and C$4.20 price target, as Goldman cites imminent production growth from the Otjikoto project which enhances BTG’s free cash flow generation and should fund future development.
  • Started at Neutral: AGI, FNV, BVN,.
  • Maintained at Buy: GG, AUY, SLV.
  • Sell: IAG, EGO, PAAS.
  • ETFs: GDX, GDXJ, NUGT, DUST, SIL, GLDX, JNUG, SLVP, RING, SILJ, JDST, GGGG, PSAU
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Comments (19)
  • WaveRider007
    , contributor
    Comments (651) | Send Message
     
    Thanks Goldman, obviously metals are looking like a good investment, relative to prior price action. Ironically, not keeping up with the inflation going on in other commodity groups. Barclays TIP fund 200 day MA crossing up. Only a matter of time before everyone agrees the emperor has no clothes.
    22 Apr 2014, 08:44 AM Reply Like
  • alterami
    , contributor
    Comments (208) | Send Message
     
    Didn't Goldman just change their outlook on gold to negative like a few weeks ago? It hasn't moved much since then.
    22 Apr 2014, 08:56 AM Reply Like
  • silv3rbull3ts
    , contributor
    Comment (1) | Send Message
     
    agree rami, they said something quite opposite not too far back. Left hand doesn't know what the right hand is up to!
    22 Apr 2014, 09:41 AM Reply Like
  • Darrol
    , contributor
    Comment (1) | Send Message
     
    When the big money starts saying negative poo about anything when it seems unreasonable to agree with them, you know they are trying to drive the price lower so they can buy cheaper shares. When they started the negative talk, knowing what I know about our dollar and the facy gold isn't keeping up with inflation, I started loading my boat right along with them. Thats why they are called the SMART money!
    22 Apr 2014, 08:56 PM Reply Like
  • milo3131
    , contributor
    Comments (38) | Send Message
     
    Yes they did, they want to help U.S. dollar, but it does not work, now they want to be on the right "boat"...You see the U.S. ECONOMY GDP rose just 0.1% for the current month, and Gold is going lower rather than higher - Gold shall be at $1331 by now, it is greatly manipulated down...
    30 Apr 2014, 09:20 AM Reply Like
  • Budavar
    , contributor
    Comments (1396) | Send Message
     
    Do we no the differences between pronouncements + internal actions?
    22 Apr 2014, 09:25 AM Reply Like
  • TDWelander
    , contributor
    Comments (639) | Send Message
     
    To Budavar. For the benefit of the readers & bloggers. Pronouncements are almost always propaganda or fiction. And internal actions, whenever you can find out what they are; are the reality.

     

    So it mostly comes down to life experience; knowing when you are hearing or reading propaganda and/or crap as opposed to the actual actions of individuals, groups or firms; usually only found out by reading annual, quarterly, and any other reports sanctioned by the accountants and/or
    top management.

     

    Say one thing and do another. Also known as Sun Zsu I believe, has been around what, two or three millennia. Or in military parlance, feint, feint,
    feint, strike; as fast as humanly possible, in an infinite number of permutations not easily predictable helps promote a victory catching the opponent off guard; generally unlawful in markets as a form of market manipulation which has not yet been banned.
    23 Apr 2014, 02:09 PM Reply Like
  • alterami
    , contributor
    Comments (208) | Send Message
     
    There are a lot of people that are bearish on gold, but I just read about a guy who swallowed 15 gold bars trying to smuggle it into India to sell. He nearly died because gold was so profitable, due to the real demand which is artificially limited due to regulations, in this case restrictions on gold ownership in India.
    22 Apr 2014, 10:10 AM Reply Like
  • Deney_Terrio
    , contributor
    Comments (244) | Send Message
     
    "He nearly died because gold was so profitable..."

     

    It should be noted that he nearly died because he was an idiot for swallowing 15 gold bars.
    22 Apr 2014, 02:34 PM Reply Like
  • alterami
    , contributor
    Comments (208) | Send Message
     
    That he was an idiot goes without saying.... :)
    22 Apr 2014, 02:48 PM Reply Like
  • Herbert Samuel Jennings
    , contributor
    Comments (287) | Send Message
     
    Now you know what the last .01% was, when they stamped .999% pure.
    23 Apr 2014, 03:23 PM Reply Like
  • techy46
    , contributor
    Comments (8013) | Send Message
     
    So what happened to GS and others forecast for gold to go to $1050 by the end of the year? I guess they're saying that ABX is fairly valued at $17.50 if gold goers down to $1050 and if it stays around $1300 then ABX should be up 20-30% from here at $20-22. Oh well, when GS talks the market yawns.
    22 Apr 2014, 10:42 AM Reply Like
  • WRC_168
    , contributor
    Comments (102) | Send Message
     
    Actually, when GS talks the market is more confused, & that help them to sound more "Sophisticated". (If you cannot convince them, then confuse them)
    22 Apr 2014, 09:58 PM Reply Like
  • whitey eckstein
    , contributor
    Comments (16) | Send Message
     
    If you like BTG you gotta like AKG more.
    22 Apr 2014, 10:57 AM Reply Like
  • jmannsc
    , contributor
    Comments (26) | Send Message
     
    I believe one of their analysts called gold miners a " slam dunk short idea for 2014 " back in Dec 2013. Now after significant gains in the sector for the first quarter, I m wondering if they, and their high end clients, are selling the sector and trying to drive the price north as they unwind their positions. Goldman calls are often contrary indicators.
    22 Apr 2014, 12:42 PM Reply Like
  • spondrei
    , contributor
    Comments (78) | Send Message
     
    I sure hope Goldman is right about the upgrade to buy for AUY. Over the last 2 weeks i have bought 75 AUY JAN 2015 10 Calls @ .40 and 75 AUY JAN 2015 13 Calls @ .20. I hope the acquisition they just made pays off. I'm also surprised both gold and the miners haven't moved to the upside with the market downturn 2-3 weeks ago.
    22 Apr 2014, 04:34 PM Reply Like
  • hihi
    , contributor
    Comments (4) | Send Message
     
    GS is giving advice to support its own positions. Since one does not really know what their position is in a given stock or commodity, their advice has to be taken with utmost prudence. You always should have an oppinion on your own rather than blindly follow GS.
    23 Apr 2014, 05:12 AM Reply Like
  • milo3131
    , contributor
    Comments (38) | Send Message
     
    This is a pure joke, lol, just a week ago GS confirmed their negative outlook for gold for a 3rd time in the past 6 months, to decline sharply to $1100 per oz., and short before that downgraded PAAS (major metal holding of many investors) with a target of $10(???!??? joke!); since this is clearly not happening, now they upgrade finally the precious metal stocks? What a non-sense...those guys are simply a disgrace of what they do...
    4 May 2014, 07:49 PM Reply Like
  • TDWelander
    , contributor
    Comments (639) | Send Message
     
    To milo3131. You did not ask what the analysts missed; probably the most important question. Analyst missed the fact that sovereign banks, especially China, will continue to buy gold at what appears to be low prices against currency. With so much currency floating around, sovereign banks can not buy enough gold. Which will likely shore up gold prices.
    5 May 2014, 02:26 PM Reply Like
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