Barrick Mining (ABX.TO)

(A Top Pick Jan 26/16. Up 49.48%.) The stock actually got up to $31, and had a 40% correction from the top. He has a technical line in the sand at about $14. He is concerned about the price of bullion in the next while.

A vastly improved company this year. His suspicion is that gold will be trading “sideways to down” to the end of the year. Next year will be very good for gold. You are always better off buying better companies, rather than pure marginality and optionality.

Doesn’t have a lot of gold exposure except for this. Feels the name is going to continue to perform well.

They returned debt earlier this year. Cost profitability has goes up and you will see better margins when they report later this week. The uncertainty with US elections and dollar, gold will come back into favour.

(Market Call Minute.) Owns a very small position, but doesn’t love the golds.

Feels the very large gold companies will do well for the balance of this year. This one will benefit because of an expansion of margin. It looks like they have sold some of their problems. Also, the Canadian generalist institutions are underweight gold, and he thinks they will have to buy this for the balance of the year.

Feels this is restructuring, and he wouldn’t be looking to Buy this. They have done a good job of bringing down their debt levels. If you want to be in gold, you are better off being in the mid-cap or smaller cap name. This one tends to get in the way of itself sometimes, and he doesn’t see where growth is going to come from.

He recommends it to clients right now. Gold stocks have been tough until very recently. Return on capital went from 12% in 2011 to 1% now. He expects that to go back up. It is highly levered so it will move a lot compared to gold. If gold moves the wrong way it could really drop. Be aware of the risk.

Hold or sell? It comes down to what you are trying to accomplish. Is this a trade or an investment? In the short term, they have been busily trying to get rid of assets, because they have a big debt overhang that has got their credit rating under review, and a negative BB. (See Top Picks.)

Has been going through an extremely difficult transition. Had been fighting for its life and had to make some extremely difficult choices. Debt levels are fairly high, but it has been going in the right direction. Still one of the larger producers globally and a low cost producer. He wouldn’t bet against them.

(Market Call Minute.) This has had a big run, so if he had it, he would be inclined to take some profits, and reinvest elsewhere.

When Barrick hit $31 as a high, it gave it a 4 times book valuation. It was a pretty extended move. It got ahead of itself. It has a lot inside of it and there is anticipation that it will come out.

(Market Call Minute.) Probably one of the best turnaround stocks in large cap gold. Has got a lot of debt off the balance sheet and the price of gold is coming back. Really cleaning up nicely.

(Market Call Minute) Tremendous recovery. He is not bullish on gold at all.

All gold stocks have run hard this year. This is partly because 1) gold was super depressed for 5 years and was due to change, 2) all the macro events, specifically the UK referendum. Now things have calmed down and people have sold off that trade. The problem is that there is no income to tide you over until things get better, so it really becomes a call on the share price. Traditionally this has been a poorly managed company, although it is getting better. He is not a big fan, and if you own he would suggest that you Hold in the hopes that you break even.