Sibanye Gold Limited
SBGL - Snapshot Report
) has the Midas touch in 2016. This Zacks Rank #1 (Strong Buy) is expected to see huge earnings growth this year as gold prices soar.
Sibanye Gold is one of the largest gold producers in South Africa. It is a mid-cap company with a market cap of $3.8 billion which operates two mines.
Earnings Estimates Soaring
With the price of gold surging this year, the gold miners find themselves in an enviable position of selling their product for a much higher price than previously possible.
The analysts have been raising estimates in the last 30 days.
The Zacks Consensus Estimate for 2016 has jumped to $2.43 from $1.87 over the last month. Sibanye made just $0.23 a share last year so that's a 956% year-over-year increase in earnings.
Estimates for 2017 have also been raised, pushing the Zacks Consensus up to $2.89. That's another 18.9% growth in earnings.
Shares Still Cheap
Even though shares have soared this year to new 2-year highs, there's still value.
Sibanye is trading with a forward P/E of just 6.9.
It also pays a dividend, which is unusual in the gold mining industry. It is currently yielding 1.2%.
The gold miners are in the top 3% of the Zacks Industry Rank because of the strong fundamentals. The Zacks Rank is a short term, 1 to 3 month, recommendation.
The gold miners are perfectly set up this summer to fit right into that short term play as earnings rise. I recently did a podcast all about the gold miners, wherein David Bartosiak and I discussed Sibanye and other top gold mining stock picks.
For investors looking for a gold miner, Sibanye is one to keep on the short list.
Now, which stocks should you sell?
As a Zacks Rank #1 Strong Buy, this Bull of the Day deserves consideration. But today there are 220 Zacks Rank #5 Strong Sells that demand even more urgent attention. If any of these are lurking in your portfolio, they should be removed immediately. Since 1988, such stocks have actually performed more than 11X worse than the S&P 500.
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