Its gone from $12 to $4 between 2010 to 2013 because cost of production has tripled.
End Jan 2010, KCN share price $8.80 AUD . Gold price was $1065 USD
End Jan 2013, KCN share price $3.99 AUD . Gold price is $1679 USD
What has gone wrong here ? Could anyone please explain ?
Despite increased production costs, KCN is still a really profitable company. In this market, I feel as though companies like these are being unfairly hammered and I rate KCN as significantly undervalued when considering a perspective that in the present day circumstances are temporary. I really feel that as the global economy picks up companies such as these will be positioned to do exceptionally well, so have placed an order to buy 444 shares at a limit of $2.25. I anticipate my order will be filled with no problems.
Really profitable? Their latest quarterly showed rising costs and not a lower end to their production forecast.
Gold would have to turn pretty hard for me to have a look and they don't seem to be turning around any time soon. Plenty of time to wait and better companies out there with cheaper oz production - check out PRU for example.
Thanks for your feedback. You've prompted me to look deeper into the company's prospects and I decided to cancel my order. I looked at some gold charts and realized this company's heavy exposure to gold prices on it's bottom line. Based on a presumption that prices would rise... the company may still do quite well... but it would be more speculative in my mind that gold won't continue to tread downward.
(A presumption that it will decrease is equally speculative but if I wouldn't be willing to buy gold at this point... I'm probably better off side-stepping this stock).
Stopped out this morning obviously, as I was with a number of others. Seeing I was out most of the morning and didn't look at the market, thank goodness for conditional orders.
Cheers
Country Lad
The correlation between all the gold names are quite high (and somewhat divoiced from the gold spot price of late) so when you have multiple long positions based on recent patters, you are going to cop a bit of portfolio heat on a day like today.
So far almost every gold miner's report have been sold...
For me, the curtain fell on Tuesday:
Distribution Indicator had fired last week;
Candlesticks shaped up for Reversal;
After more than doubling from 2 months ago, holding on seemed just too risky
So even though it's doubled from the bottom I don't think that's enough of a reason to run away last Tuesday.
Could there be some light at the end of the tunnel for Kinsgate with 1.15Mil bids and 0.65Mil asks? or will it continue its slide until it crashes through the earths crust? Here's hoping it will regain some of its value as it deserves.
Today's close will be a swing low imo
Index rebalance today so expect funny business I suppose...
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