Market Overview

More Surges in Gold Stock Short Interest (AEM, GG, IAG)

It seems the short sellers were not yet through with the leading gold stocks between the August 15 and August 30 settlement dates.

They dove in to Agnico Eagle Mines (NYSE: AEM), GoldCorp (NYSE: GG) Harmony Gold Mining (NYSE: HMY), IAMGOLD (NYSE: IAG) and Yamana Gold (NYSE: AUY), pushing short interest up by as much as 30 percent.

The short interest in Eldorado Gold (NYSE: EGO), Gold Fields (NYSE: GFI) and Kinross Gold (NYSE: KGC) also grew by double-digit percentages in the period.

Newmont Mining (NYSE: NEM), Randgold Resources (NASDAQ: GOLD) and Royal Gold (NASDAQ: RGLD) saw the numbers of their shares sold short increase somewhat.

However, AngloGold Ashanti (NYSE: AU) and Barrick Gold (NYSE: ABX) were the standouts, as the numbers of their shares sold short declined to the end of the month.

In addition, the number of shares sold short in silver companies Coeur Mining (NYSE: CDE), Pan American Silver (NASDAQ: PAAS) and Silver Wheaton (NYSE: SLW) also grew during the period -- in First Majestic Silver (NYSE: AG) it doubled -- while short interest in Hecla Mining Corp. (NYSE: HL) shrank.

Below is a quick look at how Agnico Eagle Mines, GoldCorp and IAMGOLD, which saw the largest percentage upswings, have fared and what analysts expect from them.

See also: Short Sellers Load Up On Applied Materials And Other Chip Stocks

Agnico Eagle Mines

This Toronto-based producer of gold, silver and copper saw short interest swell more than 30 percent to around 2.72 million shares, more than erasing a decline in the number of shares sold short in the previous period. That end of the month figure represented more than one percent of the float.

Analysts are looking for much lower earnings and revenue from Agnico Eagle for the current quarter. The company currently has a market capitalization of more than $4 billion and a dividend yield near 3.0 percent. The long-term earnings per share (EPS) growth forecast is less than four percent and the return on equity is less than six percent.

The consensus recommendation of the analysts who follow the stock and were surveyed by Thomson/First Call is to hold shares. Yet the mean price target, or where analysts expect the share price to go, suggests more than 19 percent potential upside. However, their target is much less than the 52-week high.

The share price has retreated nearly 10 percent in the past month and is only a little north of the 52-week low. The stock has underperformed larger competitor Newmont Mining, as well as the broader markets, over the past six months. However, it outperformed Barrick Gold in that time.

GoldCorp

The number of shares sold short in this precious metals producer surged more than 29 percent to around 8.73 million. That took back most of a retreat in the previous period. About one percent of the total float was sold short. The days to cover was about one.

This Vancouver-based company has a market cap of more than $21 billion and a dividend yield near two percent. It set a collaboration deal with Lac Seul First Nation during the period. Its long-term EPS growth forecast is more than 10 percent. The return on equity is in negative territory, though.

Out of 22 analysts polled, 14 recommend buying shares. Buy has been the consensus recommendation for the past three months. The analysts' mean price target indicates more than 20 percent upside potential. Yet that consensus target is less than the 52-week high almost a year ago.

The share price is down more than 10 percent in the past month, though it is up more than 18 percent from the low in June. Over the past six months, the stock has outperformed competitors Barrick Gold and Kinross Gold, but underperformed the broader markets.

See also: Short Sellers Return To Delta, Flee U.S. Airways

IAMGOLD

The short interest in IAMGOLD increased more than 30 percent in the latter two weeks of August to more than 8.26 million shares. That also took back most of a decline in number of shares sold short in the previous period, and it represented more than two percent of the float.

This Toronto-based miner of gold, silver and copper lowered its production costs guidance in August. The company has a market cap of about $2 billion and a dividend yield near 4.2 percent. The price-to-earnings (P/E) ratio was less than the industry average, but the return on equity is less than four percent.

The consensus recommendation of the analysts who follow IAMGOLD is to hold shares. The analysts' mean price target is more than 19 percent higher than the current share price. Note though that their consensus target is much less than the 52-week high reached last October.

The share price is almost eight percent lower than a month ago. It is also down more than 54 percent from the beginning of the year. The stock has underperformed peer Randgold Resources and the broader markets over the past six months, but it outperformed Barrick Gold.

At the time of this writing, the author had no position in the mentioned equities.

Posted-In: Agnico-Eagle Mines AngloGold Ashanti barrick gold coeur d'alene minesShort Ideas Commodities Markets Trading Ideas Best of Benzinga

 

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