In recent months, officials with the Bank of Canada (BoC) have repeatedly asserted that Canada’s economy is poised to shift from slackening domestic demand to an increase in exports and a corresponding rise in business investment. And based on the International Monetary Fund’s (IMF) latest “World Economic Outlook,” the Washington, D.C.-based fund appears to be in agreement.
The main hitch, however, is that because the US is Canada’s largest trading partner, much of this economic transition is predicated on a strengthening US economy. Given the fact that the US is in the midst of a government shutdown, and that both political parties are digging in for a protracted budget negotiation, it appears increasingly likely that the shutdown could extend far longer than initially expected.
As we noted last week, for instance, economists at Goldman Sachs project that a shutdown that lasts as long as a month could pare as much as half a point from growth in fourth-quarter gross domestic product (GDP) for the US. Meanwhile, most of the forecasts we’ve seen show the Canadian economy generally taking a hit that’s roughly half the magnitude of the one the US could suffer.
Top 5 Quality Companies To Invest In Right Now: Golden Star Resources Ltd(GSS)
Golden Star Resources Ltd., a gold mining and exploration company, through its subsidiaries, engages in the acquisition, exploration, development, and production of gold properties. It owns and operates the Bogoso/Prestea gold mining and processing operation that covers approximately 40 kilometers of strike along the southwest-trending Ashanti gold district in western Ghana; and the Wassa open-pit gold mine located to the east of Bogoso/Prestea in southwest Ghana. The company also has an 81% interest in the Prestea underground gold mine located in Ghana. In addition, it holds interests in various gold exploration projects in Ghana, Sierra Leone, Burkina Faso, Niger, and Cote d?Ivoire, as well as holds and manages exploration properties in Brazil in South America. The company was founded in 1984 and is based in Littleton, Colorado.
Advisors' Opinion:- [By Patricio Kehoe] some future and gave several reasons for my bearish stance towards the stock. A small market, high geopolitical risk in some of the countries the firm operates, along with overexpansion in times of fluctuating gold prices gave tune to the massive shedding of shares by investment gurus. Five months have past since I last considered Golden Star�� potential, and everything indicates the situation has not changed.
Guru Activity Shows a Clear Tendency
Steven Cohen (Trades, Portfolio), Chuck Royce (Trades, Portfolio) and Arnold Schneider (Trades, Portfolio), had already sold their entire holdings in the company by October 2013, indicating they had little faith in the gold miner�� recovery. By the end of the year, Jim Simons' (Trades, Portfolio) Renaissance Technologies took a similar decision, reducing its stake in the firm by 32%. This tendency towards the sale of Golden Star stock was duly noted by investors and analysts alike, and concurs with the company�� poor performance.
A Look at the Numbers
In an industry plagued by fluctuating metal prices, operating with lofty margins can be quite helpful. Yet Golden Star cannot afford such luxuries. With an operating margin of 0.1% and a net margin of -56.8% the firm is in a tight spot, especially when compared to the industry average. Unlike its industry peers��median, which are of 2.26% and -0.09%, respectively, the Toronto-based gold miner is struggling to generate decent cash flow levels. Further metrics depict a even worse situation for shareholders: return on equity is currently at -370% and revenue growth is estimated to reach a poor 2.5%. Purchasing overpriced assets, relative to current gold prices, is surely one of the reasons for such grim figures, as financial losses have taken their toll on Golden Star.
The announcement of its 2013 full year, and fourth quarter earnings only helped to add to shareholders��concerns. A 15% decline in revenue was expected by those
- [By Patricio Kehoe] ating price of the commodity, along with the geopolitical risks involved in mining in African nations such as Ghana, are just two of the obstacles the firm is facing. In addition, as one of the smallest gold mining firms in the industry, with a market cap of just $122 million, Golden Star has had a very difficult time financing its latest expansion projects. With share prices tumbling towards all-time lows, gurus such as Steven Cohen, Chuck Royce and Arnold Schneider have already sold out their positions in the troubled firm.
Why Have Gurus Lost Faith in Golden Star?
Despite aggressive expansion over the past decade, the Toronto-based gold mining firm has not been able to take advantage of its increased production output. Gold prices might have exploded over a ten-year period, yet the recent six-month decline has put a huge strain on Golden Star. The expedited maturation of its mines is particularly troubling, since the accelerated extraction rates, which allowed for short-term profits, are now falling considerably. The impact of the company�� excessive overproduction on profits and growth is clear: decreasing gold reserves mean less production, and thus reduced revenue for the gold miner. When the decline in metal prices are taken into account, the outlook is even more grim.
In addition to overexpansion at the wrong time, Golden Star�� position has weakened due to its comparably less efficient operations. Unlike industry peers, such as IamGold Corp. (IAG) or Gold Fields Ltd. (GFI), the majority of the Toronto-based miner�� assets contain refractory ore, which is far more expensive to extract than non refractory ore. And, in an attempt to switch production to the lower cost gold ore, and thus increase margins, Golden Star has depleted its mines��non refractory ore. With low reserves and mounting cash costs, the firm inevitably turned to new acquisitions.
Overpriced Acquisitions and Geopolitical Risk
The purchase
Top 5 Gold Stocks For 2014: Thompson Creek Metals Company Inc.(TC)
Thompson Creek Metals Company Inc., through its subsidiaries, engages in mining, milling, processing, and marketing molybdenum products in the United States and Canada. The company?s principal properties include the Thompson Creek Mine and mill in Idaho; a metallurgical roasting facility in Langeloth, Pennsylvania; and a joint venture interest in the Endako Mine, mill, and roasting facility in British Columbia. It also holds interests in development projects comprising the Davidson molybdenum property and the Berg copper-molybdenum-silver property located in northern British Columbia; the Howard?s Pass property, a lead and zinc project situated in the Yukon territory-northwest territories border; and the Maze Lake property, a gold project located in the Kivalliq district of Nunavut. The company produces molybdenum products, primarily molybdic oxide and ferromolybdenum, as well as soluble technical oxide, pure molybdenum tri-oxide, and high purity molybdenum disulfide. As o f December 31, 2010, its consolidated recoverable proven and probable ore reserves totaled 462.2 million pounds of contained molybdenum in the Thompson Creek Mine and the Endako Mine. The company was formerly known as Blue Pearl Mining Ltd. and changed its name to Thompson Creek Metals Company Inc. in May 2007. Thompson Creek Metals Company Inc. is based in Denver, Colorado.
Advisors' Opinion:- [By Selena Maranjian]
Beaten-down companies that you think are likely to recover strongly are also good candidates. Molybdenum miner Thompson Creek Metals (NYSE: TC ) , for example, sports average annual losses of 35% over the past five years, and carries substantial debt, but molybdenum's long-term outlook is promising, with price increases likely, and the company has a promising gold and copper mine on track to start producing by the end of the year. Freeport-McMoRan Copper & Gold (NYSE: FCX ) is another major molybdenum player, with considerable operations in other metals, as well -- along with new investments in oil and gas production.
- [By Jake L'Ecuyer]
Leading and Lagging Sectors
Basic Materials shares gained around 0.24 percent in trading on Wednesday. Meanwhile, top gainers in the sector included Harmony Gold Mining Company (NYSE: HMY), up 4.1 percent, and Thompson Creek Metals Company (NYSE: TC), up 3.8 percent. In trading on Wednesday, cyclical consumer goods & services shares were relative laggards, down on the day by about 0.36 percent. - [By Selena Maranjian]
The biggest new holdings are Chesapeake Energy�puts, and shares of Discovery Communications. Other new holdings of interest include Halcon Resources (NYSE: HK ) , and Thompson Creek Metals (NYSE: TC ) . Oil and gas company Halcon, operating in the promising Bakken region, as well as Texas's productive Eagle Ford shale region, among others, is expected to grow by 30% annually over the coming years. It recently reported 2012 net daily production 128% higher than year-ago levels, and proven reserves up 417%. Halcon was recently one of my colleague Joel South's top two energy holdings, and analysts at Stifel recently upped its rating�from Hold to Buy.
- [By Garrett Cook]
Monday morning, the basic materials sector proved to be a source of strength for the market. Leading the sector was strength from AK Steel Holding (NYSE: AKS) and Thompson Creek Metals Company (NYSE: TC).
Top 5 Gold Stocks For 2014: Pershing Gold Corp (PGLC)
Pershing Gold Corporation, incorporated on August 2, 2007, is a gold and precious metals exploration company. The Company is pursuing exploration and development opportunities primarily in Nevada. It is focused on exploration at its Relief Canyon properties in Pershing County in northwestern Nevada. None of the Company�� properties contain proven and probable reserves, and all of its activities on all of its properties are exploratory in nature. The Company seeks properties with known mineralization that are in an advanced stage of exploration and have previously undergone some drilling but are under-explored. It is focused on exploration of the Relief Canyon properties, recommissioning the Relief Canyon gold processing facility and, if economically feasible, commencing mining at the Relief Canyon Mine.
Relief Canyon Mine Property
The Company�� Relief Canyon properties totals approximately 25,000 acres and consists of approximately 940 owned unpatented mining claims, 120 owned millsite claims, 170 leased unpatented mining claims, and leased and subleased private lands. The Company drilled 44 holes for approximately 28,500 feet in 2013. This drilling was on land adjacent to the current deposit and focused on extending and upgrading the existing deposit. In January 2013 the Company reported 32,541,000 tons of mineralized material at an average grade of 0.017 ounces of gold per ton and a cut-off grade of 0.0046 ounces of gold per ton.
Advisors' Opinion:- [By ValueInvestor7]
I listen to investing advice from self-made billionaire investors, and I try to ignore advice from everyone else. I suspect readers on this website will appreciate this, where thankfully the Focus is still Gurus. To this end, I bring you the instructive story of Pershing Gold Corp (PGLC) and Levon Resources (TSE: LVN) (LVNVF).
Top 5 Gold Stocks For 2014: Australian Dollar(AU)
AngloGold Ashanti Limited primarily engages in the exploration and production of gold. It also produces silver, uranium oxide, and sulfuric acid. The company conducts gold-mining operations in South Africa; continental Africa, including Ghana, Guinea, Mali, Namibia, and Tanzania; Australia; and the Americas, which include Argentina, Brazil, and the United States. It also has mining or exploration operations in the Democratic Republic of the Congo, Guinea, and Colombia. As of December 31, 2010, the company had proved and probable gold reserves of 71.2 million ounces. The company has a strategic alliance with Thani Dubai Mining Limited to explore, develop, and operate mines across the Middle East and parts of North Africa. AngloGold Ashanti Limited, formerly known as Vaal Reefs Exploration and Mining Company Limited, was founded in 1944 and is headquartered in Johannesburg, South Africa.
Advisors' Opinion:- [By Sally Jones]
Anglogold Ashanti Limited (AU)
Down 65% over 12 months, Anglogold Ashanti Limited has a market cap of $4.85 billion, and trades with a P/E of 8.10.
- [By Holly LaFon]
The second largest market cap company, at $11.22 billion, is Anglogold Ashanti Ltd. (AU). Its afternoon stock price of $29.15 is within 5% of its three-year low, and has experienced a more significant drop than Newmont ��it is down 44.9% from its high price of $52.86 a share.
No comments:
Post a Comment