Barrick Mining (ABX.TO)

A very, very large gold company. Attempting to grow is very difficult, whereas a smaller company can, and can even get taken out. The problem is that they all tend to be below the price where you first bought them. Gold has been firming up a little lately. This company would not be his choice.

He prefers a stock to the bullion. How can you calculate what gold is worth. The price of gold is what it is and you ask if the company can make much money. ABX-T cannot make much money right here. If we get a lift in the gold price then you get a bigger lift in the price of the stock.

He would call this a Buy, but it is not clear-cut. It is cyclical. One concern is that they have such a high level of debt. When things go well this company is going to do great, but not so well when things are bad. It will be more volatile than the market, but overall, a good company.

They have a lot of difficult geography in the sense of geopolitics. It seems that everywhere they have a mine, they are running into environmental and governmental activism and ecological concerns. It is not as easy for companies like this to go to Chile and dig a hole in the ground, and start taking out ore.

A tremendous recovery story. They’ve fixed their balance sheet and operating statements. For individual investors who are getting back into gold, consider buying one of the large cap ETF’s, rather than buying an individual stock. This limits single company risk.

He is a gold bull currently. This company generates a decent amount of free cash flow. First quarter was an ugly quarter across the board and the stock reacted accordingly. One of the few names you can get in the gold space that generates a reasonable amount of free cash to the bottom line, which is something he focuses on. A reasonable long-term gold name to own. The net debt number is not something that alarms him.

XGD-T is the market cap weighted way to play the golds. ZGD-T is another one. Gold is probably going to be 1100-1350 over the next couple of years. He would buy dips in the gold names for a return to $1250 over the summer. It is a good play this summer.

They have done a great job in bringing their costs down. If you want to be a gold stock investor, he would prefer going with something like this, versus some of the others. At the beginning of the year, it showed a strong run, but has pulled back now and is currently at a critical level at around $22. If it breaks below that, we might see some weakness. He would look for support at around $21. This also has some geopolitical risks.

He has been a long-time Bull on gold. Likes this as a senior play, but prefers Gold Corp (G-T). Thinks the price of gold is going higher, between $1300-$1400 this year, and that would help all gold stocks.

Seasonally you should own gold from the end of the summer into November. Gold has to break $1250, but may have trouble.

It broke out of a down trend earlier. Gold tends to slow down during March to May. ABX-T would go down. Put some stops on this. As soon as gold weakens, then exit.

It will be interesting if they can get a positive transit of EBV+4, or is this a double top? He is watching this one carefully to see what happens. $17.21 is the model rice, 30% lower. The earnings forecast is very disappointing. We will see. Sell around $26.66 and see what happens. He thinks a top is forming.

(Top Pick Jan 26/16, Up 66.68%) It has already had a massive set back. He was glad of that. Gold has a place in every portfolio. Trump may push up the US$ which is negative for gold. Interest rate increases would be negative for gold. So he has stepped aside from the group.

Gold is very difficult in that the underlying commodity goes up and down, and is very difficult to predict the direction. However, it looks like gold has found a comfortable level, and doesn’t feel like it is going to go down from here. If anything, he feels it will go higher. This company is at an all-time low on ROC. Because of the nature of the cycle they are going to start to turn that around. Due to their leverage on their balance sheet, it is going to actually work in their favour. He could see this, optimistically, in the high $30.

He is bearish on gold. Bit Coin shot up last night. Chinese investors are going after Bit Coin instead of gold. ABX-T had a positive transit last week. His model price is $17.91. The fundamentals aren’t quite there.