Newmont mining Corporation (US:NEM) reported earnings beat and not held by revenue. This report has led to little change in the share price, currently trading at just over $ 40 per share. Gold prices on the rise, the company newmont stock looks suitable for higher profits in the foreseeable future.
However, taking into account the ratio of stock price to the value of the metal it mines, I recommend to look for the nem stock find save cost.
Newmont Stocks Beat Earnings, Missed Revenue
NEM announced in Q1 net profit at the rate of 35 cents per share 2 cents per share, above the consensus forecast. However, revenue was a different story. Income of 1.82 billion dollars showing an increase by 7.7% more than the year ago levels. But this figure missed estimates of $ 20 million.
In the short term, Newmont mining stock has the potential to see growth. In past years, the stock bounced between gains and losses based on fluctuations in the price of gold. However, over the next three years, analysts expect profit Newmont stock to remain on a sustainable growth path.
Will it translate into sustainable growth of reserves remains unclear. The stock is currently trading with a forward price to earnings (PE ratio) of about 30. This is significantly above both the S & P 500 and industry average. Furthermore, even if fiscal 2021 forecast profit of $1.91 per share holds, the PE would stand at a higher level than the historical average.
To avoid the nem stock
However, my colleague Lawrence Meyers described the main problems with the stock it is good. Shares little appreciation for decades. NEM stock currently trading at levels that were often seen in the middle of 1990-ies. It has been a slight long-term increase in the last 25 years, the S&P 500 index has risen about six times over the same span of time.
In short, the company newmont stock is likely to take investors ‘ money in a timely trade. In the presence of a history of trading above, when gold prices rose and fall back when gold prices fall on lower levels. Besides, he can’t move in proportion to the value of the metal which it produces.
We live in an unstable world, therefore, holds a portion of its assets in store of value precious metals make sense. However, if I had to do it, I’d just buy physical gold.
Gold is valuable in a crisis without balance sheet risk in or his peers, such as Royal gold, Inc (USA) (code Nasdaq:RGLD), Barrick gold Corporation (USA) (Ticker NYSE:ABX) or Goldcorp Inc. (USA) (TICKER NYSE:GG).
The ban scenario of high inflation, I see no long term value in holding any of these shares. Investors who want a safe stock market investment will do better in the s&P 500 tracker, for example in the spdr s&P 500 in real-time trust (NYSEARCA:spy) or the vanguard 500 index Fund investor shares (MUTF:VFINX).
Those who want the security of precious metals should look outside the stock market.
The bottom line on Newmont stock
Although market conditions remained Newmont mining stock incentive for growth, those looking for gold to play or store of value must be sought elsewhere. To be sure, the history of the nem stock has shown justice to be a proxy for gold prices. However, this means that the stock price, a slight increase over the last quarter century.
Although the stock price may rise with increase in profits, NEM typically makes only money of investors in a timely trades.
If you own stock in this sector, I will repeat the recommendation of Mr. Meyers of the ABX shares. Barrick maintains a lower coefficient of PE. Also, while he has recently fallen to the level of 1990-ies, it has sustained high growth rates in stock prices.
Yet, for all the others who want gold-investing, make it simple and buy real gold.
At the time of this writing, will Healy not to take a position in any of the above actions.