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Watch for the Gold Stocks in Q2: AEM, ABX, GG, GSS, KGC, NGD
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This year, gold has been the best performing asset, trumping major equity indices, investment grade and high-yield bonds and commodity indices. The yellow metal has gained 24% year to date, with current prices above the $1,300 mark.
The rally in gold prices was primarily fuelled by the slowdown in China. Further, volatile equity markets and introduction of negative interest rates by several central banks (including Japan) have spurred safe-haven demand for gold. Gold prices also benefited from strong investment inflows. This safe-haven asset has gained both pre and post Brexit chaos. The U.S. Federal Reserve’s dovish stance has been another major factor that has helped gold regain its shine.
While the impressive June employment report has raised expectations for a rate hike, concerns about global economic growth and lingering economic and political uncertainties in a post-Brexit world are likely to prompt the Fed to hold off on raising interest rates for now. A delay in raising interest rates elevates demand for gold, which produces no income, but relies on price appreciation to attract investors.
The gold mining industry is grouped under the Basic Material sector – one of the 16 broad Zacks sectors. Of the 25% of the companies in the sector that have reported their numbers, earnings have edged up 1.2%. Considering all the companies that are yet to report, the sector’s earnings are expected to fall 13.9% in the quarter.
However, it is not the only sector to suffer an earnings decline this quarter. Earnings growth is anticipated to be in the negative territory for 9 of the 16 Zacks sectors, with Energy being the biggest laggard. Apart from Basic Materials, Transportation is also expected to see a double-digit decline. Overall, total S&P 500 earnings are expected to be down 3.4% on a 0.5% dip in revenues. If the estimates are proved to be true, this will be the fifth quarter in a row to suffer an earnings decline (read more: Decisive Week for the Q2 Earnings Season?).
Although this forecast paints a gloomy picture for the overall sector, the gold mining industry is placed among the top tier of all industries at #7. Let’s see what’s in store for the gold miners that are set to report quarterly numbers on Jul 27.
Agnico Eagle Mines, Ltd. (AEM - Free Report) – engaged in the exploration, development, and production of mineral properties in Canada, Finland, and Mexico – is expected to report second-quarter results on Jul 27 after the market closes.
The company posted a positive earnings surprise of 200% last quarter. It has an impressive average positive earnings surprise of 100% in the last 4 quarters.
The company will gain from a more constructive gold price environment and consistent strong operating performance from all of its mines. It is also on track to meet the top end of its 2016 production guidance. Agnico Eagle Mines has a Zacks Rank #2 (Buy) and an Earnings ESP of +0.00% which makes surprise prediction difficult.
The largest gold mining company in the world, Barrick Gold Corporation is expected to report earnings on Jul 27.
The company delivered an earnings surprise of 10% last quarter and has an average positive earnings surprise of 26.91% in the last four quarters.
Barrick Gold has a Zacks Rank #2 (Buy) and an Earnings ESP of +0.00% which make surprise prediction difficult.
Goldcorp, Inc. is engaged in the acquisition, exploration, development, and operation of precious metal properties in Canada, the United States, Mexico, and Central and South America. It is expected to report on Jul 27, 2016.
The company delivered a positive earnings surprise of 125% in the last quarter. Goldcorp has a mixed record of earnings history with a negative earnings surprise of 160.18%.
Goldcorp’s Zacks Rank #1 (Strong Buy) and Earnings ESP of 0.00% do not conclusively show that the company is likely to beat earnings estimates this quarter.
Golden Star Resources, Ltd. owns and operates gold mines in Ghana as well as other parts of the world. The company is expected to report earnings on Jul 27, 2016.
The company delivered a positive earnings surprise of 100% last quarter. Goldcorp has a decent record of earnings history, beating the Zacks Consensus Estimate in three of the last four quarters, with a positive earnings surprise of 85.72%.
Golden Star’s Zacks Rank #1 (Strong Buy) and Earnings ESP of 0.00% make surprise prediction difficult.
Kinross Gold Corporation (KGC - Free Report) engages in the acquisition, exploration, development, and production of gold properties and will report results on Jul 27.
The company delivered a positive earnings surprise of 100% last quarter. Kinross Gold has a decent record of earnings history, beating the Zacks Consensus Estimate in three of the last four quarters, with a positive earnings surprise of 28.33%.
NovaGold – a gold and copper company engaged in the exploration and development of mineral properties in Alaska and Western Canada – will report results on Jul 27. The company has an average positive earnings surprise of 50% in the past 4 quarters.
NovaGold has a Zacks Rank #1 (Strong Buy) and an Earnings ESP of +0.00% which make surprise prediction difficult.
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Watch for the Gold Stocks in Q2: AEM, ABX, GG, GSS, KGC, NGD
This year, gold has been the best performing asset, trumping major equity indices, investment grade and high-yield bonds and commodity indices. The yellow metal has gained 24% year to date, with current prices above the $1,300 mark.
The rally in gold prices was primarily fuelled by the slowdown in China. Further, volatile equity markets and introduction of negative interest rates by several central banks (including Japan) have spurred safe-haven demand for gold. Gold prices also benefited from strong investment inflows. This safe-haven asset has gained both pre and post Brexit chaos. The U.S. Federal Reserve’s dovish stance has been another major factor that has helped gold regain its shine.
While the impressive June employment report has raised expectations for a rate hike, concerns about global economic growth and lingering economic and political uncertainties in a post-Brexit world are likely to prompt the Fed to hold off on raising interest rates for now. A delay in raising interest rates elevates demand for gold, which produces no income, but relies on price appreciation to attract investors.
The gold mining industry is grouped under the Basic Material sector – one of the 16 broad Zacks sectors. Of the 25% of the companies in the sector that have reported their numbers, earnings have edged up 1.2%. Considering all the companies that are yet to report, the sector’s earnings are expected to fall 13.9% in the quarter.
However, it is not the only sector to suffer an earnings decline this quarter. Earnings growth is anticipated to be in the negative territory for 9 of the 16 Zacks sectors, with Energy being the biggest laggard. Apart from Basic Materials, Transportation is also expected to see a double-digit decline. Overall, total S&P 500 earnings are expected to be down 3.4% on a 0.5% dip in revenues. If the estimates are proved to be true, this will be the fifth quarter in a row to suffer an earnings decline (read more: Decisive Week for the Q2 Earnings Season?).
Although this forecast paints a gloomy picture for the overall sector, the gold mining industry is placed among the top tier of all industries at #7. Let’s see what’s in store for the gold miners that are set to report quarterly numbers on Jul 27.
Agnico Eagle Mines, Ltd. (AEM - Free Report) – engaged in the exploration, development, and production of mineral properties in Canada, Finland, and Mexico – is expected to report second-quarter results on Jul 27 after the market closes.
The company posted a positive earnings surprise of 200% last quarter. It has an impressive average positive earnings surprise of 100% in the last 4 quarters.
AGNICO EAGLE Price and EPS Surprise
AGNICO EAGLE Price and EPS Surprise | AGNICO EAGLE Quote
The company will gain from a more constructive gold price environment and consistent strong operating performance from all of its mines. It is also on track to meet the top end of its 2016 production guidance. Agnico Eagle Mines has a Zacks Rank #2 (Buy) and an Earnings ESP of +0.00% which makes surprise prediction difficult.
The largest gold mining company in the world, Barrick Gold Corporation is expected to report earnings on Jul 27.
The company delivered an earnings surprise of 10% last quarter and has an average positive earnings surprise of 26.91% in the last four quarters.
BARRICK GOLD CP Price and EPS Surprise
BARRICK GOLD CP Price and EPS Surprise | BARRICK GOLD CP Quote
Barrick Gold has a Zacks Rank #2 (Buy) and an Earnings ESP of +0.00% which make surprise prediction difficult.
Goldcorp, Inc. is engaged in the acquisition, exploration, development, and operation of precious metal properties in Canada, the United States, Mexico, and Central and South America. It is expected to report on Jul 27, 2016.
The company delivered a positive earnings surprise of 125% in the last quarter. Goldcorp has a mixed record of earnings history with a negative earnings surprise of 160.18%.
GOLDCORP INC Price and EPS Surprise
GOLDCORP INC Price and EPS Surprise | GOLDCORP INC Quote
Goldcorp’s Zacks Rank #1 (Strong Buy) and Earnings ESP of 0.00% do not conclusively show that the company is likely to beat earnings estimates this quarter.
Golden Star Resources, Ltd. owns and operates gold mines in Ghana as well as other parts of the world. The company is expected to report earnings on Jul 27, 2016.
The company delivered a positive earnings surprise of 100% last quarter. Goldcorp has a decent record of earnings history, beating the Zacks Consensus Estimate in three of the last four quarters, with a positive earnings surprise of 85.72%.
GOLDEN STAR RES Price and EPS Surprise
GOLDEN STAR RES Price and EPS Surprise | GOLDEN STAR RES Quote
Golden Star’s Zacks Rank #1 (Strong Buy) and Earnings ESP of 0.00% make surprise prediction difficult.
Kinross Gold Corporation (KGC - Free Report) engages in the acquisition, exploration, development, and production of gold properties and will report results on Jul 27.
The company delivered a positive earnings surprise of 100% last quarter. Kinross Gold has a decent record of earnings history, beating the Zacks Consensus Estimate in three of the last four quarters, with a positive earnings surprise of 28.33%.
KINROSS GOLD Price and EPS Surprise
KINROSS GOLD Price and EPS Surprise | KINROSS GOLD Quote
Kinross Gold has a Zacks Rank #2 (Buy) and an Earnings ESP of +0.00% which make surprise prediction difficult.
NovaGold Resources, Inc. (NGD - Free Report)
NovaGold – a gold and copper company engaged in the exploration and development of mineral properties in Alaska and Western Canada – will report results on Jul 27. The company has an average positive earnings surprise of 50% in the past 4 quarters.
NEW GOLD INC Price and Consensus
NEW GOLD INC Price and Consensus | NEW GOLD INC Quote
NovaGold has a Zacks Rank #1 (Strong Buy) and an Earnings ESP of +0.00% which make surprise prediction difficult.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >