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Bear of the Day: Randgold (GOLD)

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You may think that’s today’s Bear of the Day is the perfect place to stash some money during a downturn in the market. It makes sense that something defensive like precious metals would be a decent hiding place. However, analysts have been dropping their earnings estimates rather aggressively. That could mean that there is trouble brewing beneath the surface. I’m not here to sound the alarm, just want to make sure people understand the moves from analysts.

I’m talking about Zacks Rank #5 (Strong Sell) Randgold Resources (GOLD - Free Report) . Randgold Resources is an international gold mining and exploration business. It has to date discovered the 7 Moz Morila deposit in southern Mali, the plus 5 Moz Yalea deposit in western Mali and the 3 Moz Tongon deposit in the Côte d'Ivoire. The Company successfully developed the Morila deposit into one of the world's largest and highest-margin gold mines. In addition, Randgold Resources has a portfolio of prospective exploration projects across Africa in Mali, Côte d'Ivoire, Senegal, Burkina Faso, Ghana and Tanzania.

Randgold is in the Gold Mining Industry which ranks in the Bottom 7% of our Zacks Industry Rank. The reason for the unfavorable Zacks Rank lies in the recent earnings estimate revisions to the downside coming from analysts. Over the last sixty days, four analysts have cut their estimates for the current year and next year. The bearish sentiment has dropped our Zacks Consensus Estimates for those periods considerably. The current year consensus has dipped from $3.08 to $2.70 while next year’s number has gone from $3.66 down to $3.32.

Investors looking for other names in the same industry should check out two Zacks Rank #2 (Buy) companies. These companies are Harmony Gold Mining (HMY - Free Report) and Pretium Resources .

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