It was bad enough that China disappointed the market with lower growth numbers coming in, the mining sector in general has been in a slump for some while, today they were hit hard again, but some of the biggest hits were the gold and silver miners. Gold itself had one of the biggest daily falls in a long time prompting some to suggest that it is now in a bear market, time will tell on that one, but the gold miners are now heading for falls that some haven't seen since the dark days of 2008.
Today's % falls:
Petropavlovsk - 24.01%
Fresnillo - 15.16%
Hochschild Mining - 8.37%
Randgold Resources - 8.33%
3 month change:
Petropavlovsk - 61.56%
Hochschild Mining - 46.62%
Fresnillo - 38.84%
Randgold Resources - 22.84%
More speculative African gold mining smaller company Avocet Mining is down 74.33% in 3 months.
Given current sentiment around gold and silver appears to be more negative, it is difficult to say if any of these represent a bargain at current levels or not. Technically, the charts look awful and patience is probably needed to wait for some more positive signs that the falls are over. These can go up as quick as they can fall, but right now it is guesswork as to when that turnaround is coming.
Fresnillo write up in Telegraph:
ReplyDeleteStill, its balance sheet has no debt, with its cash holdings standing at $613.8m at the end of last year. The total full – year dividend of 57.9 cents was, meanwhile, above market consensus.
Just over a year ago, this column was advising would – be buyers to wait, at a time when the shares were trading on an earnings multiple of 21.5 and yielded a prospective 2pc. Today, the shares trade on a multiple of 16.6 and yield a prospective 3.6pc.
Questor remembers its advice to keep an eye out for buying opportunities, but would also repeat the investment cliché of “never try to catch a falling knife”.
Until the silver price – and Fresnillo – find a floor, this stock has to stay a hold.
http://www.telegraph.co.uk/finance/markets/questor/9996182/Questor-Fresnillo-suffers-as-silver-loses-shine.html
Apparently only Hargreaves Landsowne and FRES are the only two FT100 firms not using offshore tax havens in their accounting. Is probably a rather useless fact however.
ReplyDelete