We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
How Will Gold Mining ETFs Fare this Earnings Season?
Read MoreHide Full Article
Gold-related investments are on the rise lately with President Trump’s debatable plans and policies spurring concerns in the market. His policies regarding immigration curb, travel ban, border tax, and termination of trade agreements are thought by many to put trade, economic growth and political stability at risk and consequently boosted safe-haven assets like gold (read: Top ETF Stories of January 2017).
The gold bullion scored the largest one-month advancement in January since June. A lower greenback and the sudden safe haven demand led gold bullion ETF SPDR Gold SharesGLD to add about 5.4% in the month. The fund is up about 7.2% so far this year (as of February 7, 2017) (read: Does The Donald Hold The Trump Card for Gold ETFs?).
Along with the gold bullion, mining ETFs too climbed higher as these normally act as leveraged plays of the underlying metal. VanEck Vectors Gold Miners ETF (GDX - Free Report) has added about 20.9% so far this year (as of February 7, 2017).
This makes it more important to have a look at how gold mining stocks are likely to perform this earnings season. This is especially true given the steady stock performance of gold mining stocks as against the unfavorable Zacks Industry Rank in the bottom 34%.
In such a scenario, earnings can be a good guideline to understand the future course of the sector. We have thus highlighted our earnings prediction of some of the gold mining companies.
Surprise Predictions
Barrick Gold Corporation – expected to come up with earnings on February 15 after market close – has a Zacks Rank #3 (Hold) and an Earnings ESP of 0.00%, making surprise prediction difficult. The Zacks Consensus Estimate for the upcoming quarter is $0.20, unchanged over the past two months. The stock has a moderate VGM (Value, Growth and Momentum) Style Score of C. The company’s earnings have beaten estimates in three of the last four quarters, bringing the average surprise to 12.65%.
Newmont Mining Corporation (NEM - Free Report) – expected to report on February 21 after market close – has a Zacks Rank #3 and an Earnings ESP of -24.39%, again putting the odds of an earnings beat in jeopardy. The Zacks Consensus Estimate for the upcoming quarter is $0.41, down from $0.45 one month back. However, the stock has a favorable VGM Style Score of B. Average positive earnings surprise of the last four quarters is 11.90% with two quarters recording beat, one witnessing a gigantic miss and another barely meeting estimates.
Goldcorp Inc. has a Zacks Rank #5 (Strong Sell) and an Earnings ESP of -12.50%, again putting the odds of an earnings beat at risk. The stock has an unfavorable VGM Style Score of D. The earnings surprise track over the past four quarters is disappointing with an average surprise of negative 152.1%. The company witnessed negative earnings estimate revision of two cents over the past 30 days for the soon-to-be-reported quarter.
Bottom Line
Given that the companies have a moderate-to-unfavorable Zacks Rank and a not-so-favorable ESP this season, gold mining ETFs may not please investors with a stellar scorecard. However, things now depend on the course of the greenback, the geopolitical backdrop especially with some key elections lined up in Europe and effectiveness of Trump’s policies (read: 6 ETFs for Fragile February).
Investors bullish on the sector on the possibility of a safe haven rally but confused about which stock to pick, can easily play gold mining ETFs like GDX, VanEck Vectors Junior Gold Miners ETF (GDXJ - Free Report) , Sprott Gold Miners Exchange Traded Fund (SGDM - Free Report) and iShares MSCI Global Gold Miners ETF (RING - Free Report) (see all materials ETFs here).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
How Will Gold Mining ETFs Fare this Earnings Season?
Gold-related investments are on the rise lately with President Trump’s debatable plans and policies spurring concerns in the market. His policies regarding immigration curb, travel ban, border tax, and termination of trade agreements are thought by many to put trade, economic growth and political stability at risk and consequently boosted safe-haven assets like gold (read: Top ETF Stories of January 2017).
The gold bullion scored the largest one-month advancement in January since June. A lower greenback and the sudden safe haven demand led gold bullion ETF SPDR Gold Shares GLD to add about 5.4% in the month. The fund is up about 7.2% so far this year (as of February 7, 2017) (read: Does The Donald Hold The Trump Card for Gold ETFs?).
Along with the gold bullion, mining ETFs too climbed higher as these normally act as leveraged plays of the underlying metal. VanEck Vectors Gold Miners ETF (GDX - Free Report) has added about 20.9% so far this year (as of February 7, 2017).
This makes it more important to have a look at how gold mining stocks are likely to perform this earnings season. This is especially true given the steady stock performance of gold mining stocks as against the unfavorable Zacks Industry Rank in the bottom 34%.
In such a scenario, earnings can be a good guideline to understand the future course of the sector. We have thus highlighted our earnings prediction of some of the gold mining companies.
Surprise Predictions
Barrick Gold Corporation – expected to come up with earnings on February 15 after market close – has a Zacks Rank #3 (Hold) and an Earnings ESP of 0.00%, making surprise prediction difficult. The Zacks Consensus Estimate for the upcoming quarter is $0.20, unchanged over the past two months. The stock has a moderate VGM (Value, Growth and Momentum) Style Score of C. The company’s earnings have beaten estimates in three of the last four quarters, bringing the average surprise to 12.65%.
Newmont Mining Corporation (NEM - Free Report) – expected to report on February 21 after market close – has a Zacks Rank #3 and an Earnings ESP of -24.39%, again putting the odds of an earnings beat in jeopardy. The Zacks Consensus Estimate for the upcoming quarter is $0.41, down from $0.45 one month back. However, the stock has a favorable VGM Style Score of B. Average positive earnings surprise of the last four quarters is 11.90% with two quarters recording beat, one witnessing a gigantic miss and another barely meeting estimates.
Goldcorp Inc. has a Zacks Rank #5 (Strong Sell) and an Earnings ESP of -12.50%, again putting the odds of an earnings beat at risk. The stock has an unfavorable VGM Style Score of D. The earnings surprise track over the past four quarters is disappointing with an average surprise of negative 152.1%. The company witnessed negative earnings estimate revision of two cents over the past 30 days for the soon-to-be-reported quarter.
Bottom Line
Given that the companies have a moderate-to-unfavorable Zacks Rank and a not-so-favorable ESP this season, gold mining ETFs may not please investors with a stellar scorecard. However, things now depend on the course of the greenback, the geopolitical backdrop especially with some key elections lined up in Europe and effectiveness of Trump’s policies (read: 6 ETFs for Fragile February).
Investors bullish on the sector on the possibility of a safe haven rally but confused about which stock to pick, can easily play gold mining ETFs like GDX, VanEck Vectors Junior Gold Miners ETF (GDXJ - Free Report) , Sprott Gold Miners Exchange Traded Fund (SGDM - Free Report) and iShares MSCI Global Gold Miners ETF (RING - Free Report) (see all materials ETFs here).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>