Market Overview

Short Interest Surges in Barrick Gold and Other Gold Miners (AEM, AU, ABX)

Among gold stocks, Agnico-Eagle Mines (NYSE: AEM), AngloGold Ashanti (NYSE: AU), Barrick Gold (NYSE: ABX) and GoldCorp (NYSE: GG) saw significant upswings in short interest between the June 14 and June 28 settlement dates.

Other gold mining companies that also saw the number of shares sold short increase by double-digit percentages in the period include Eldorado Gold (NYSE: EGO), Harmony Gold Mining (NYSE: HMY), IAMGOLD (NYSE: IAG), Newmont Mining (NYSE: NEM), Randgold Resources (NASDAQ: GOLD) and Royal Gold (NASDAQ: RGLD).

Short interest in Gold Fields (NYSE: GFI) and Yamana Gold (NYSE: AUY) increased more modestly.

However, note that short sellers retreated from Kinross Gold (NYSE: KGC) in the latter weeks of June.

In addition, the shares sold short in silver companies Coeur Mining (NYSE: CDE), Pan American Silver (NASDAQ: PAAS) and Silver Wheaton (NYSE: SLW) also increased during the period, while short interest in First Majestic Silver (NYSE: AG) declined.

Here is a quick look at how Agnico-Eagle Mines, AngloGold Ashanti and Barrick Gold have fared and what analysts expect from them.

Agnico-Eagle Mines

This Toronto-based producer of gold, silver and copper saw short interest swell more than 66 percent to more than 2.94 million shares, on top of a rise of more than 49 percent in the previous period. However, that represented less than two percent of the float, and days to cover was a little more than one.

Analysts are looking for much lower earnings and revenue from Agnico-Eagle for the current quarter and the next. The company now has a market capitalization of about $5 billion and a dividend yield near 3.2 percent. The long-term earnings per share (EPS) growth forecast is less than four percent and the return on equity is less than eight percent.

The consensus recommendation of the analysts who follow the stock and were surveyed by Thomson/First Call is to hold shares. The mean price target, or where analysts expect the share price to go, suggests more than 29 percent potential upside. However, their target is much less than the 52-week high.

The share price is down more than 45 percent since the beginning of the year, though about 16 percent higher than a recent multiyear low. The stock has underperformed larger competitor Newmont Mining, as well as the broader markets, over the past six months. But it outperformed Barrick Gold in that time.

AngloGold Ashanti

This South African gold producer saw short interest surge more than 67 percent in the period to more than 10.81 million shares. That was the highest number of shares sold short in at least a year, having tripled since mid-March. The days to cover remains more than two.

The share price of AngloGold Ashanti continued to fall in the waning days of June. The company currently has a market capitalization near $5 billion and a dividend yield of about 1.7 percent. The long-term earnings per share (EPS) growth forecast is more than 12 percent and the return on equity is about 15 percent.

Just two of the five analysts surveyed recommend buying shares, and one rates the stock at Underperform. The mean price target is almost 52 percent higher than the current share price. Note though that the consensus target is well less than the 52-week high here too.

The share price is down more than 57 percent since the beginning of the year. It hit a multiyear low Friday after the Fourth of July holiday. Over the past six months, the stock has underperformed competitor Newmont Mining, but it also outperformed Barrick Gold.

Barrick Gold

This gold and copper producer saw short interest jump more than 56 percent to about 20.91 million shares. That was the greatest number of shares sold short in at least a year, and more than double the short interest in mid-April. Short interest was about two percent of the float at the end of June.

Toronto-based Barrick Gold laid off 100 workers in it Toronto offices in the period. The company currently has a market cap of about $15 billion and a dividend yield near 5.8 percent. But the long-term EPS growth forecast is about six percent and the return on equity is less than one percent.

Half the 28 analysts polled recommend buying shares, with six of them rating the stock at Strong Buy. The upside implied by their mean price target is more than 37 percent, due to the falling share price. Here again, the consensus target is much less than the 52-week high.

Though the share price has turned up from last week's 52-week low, it is still more than 57 percent lower than at the beginning of the year. As mentioned above, the stock has underperformed Agnico-Eagle Mines and AngloGold Ashanti over the past six months.

Posted-In: Agnico-Eagle Mines AngloGold Ashanti barrick gold Coeur Mining Eldorado Gold First Majestic SilverShort Ideas Trading Ideas Best of Benzinga

 

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