NCM - Newcrest Mining
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Newcrest chart update (monthly candle chart). $16 is a critical support level which is holding for the moment....
I reckon we will see it push over $17 today, but with the 2013 QR due tomorrow if results are poor (and simply looking at that graph I would assume they wont be exceptional) we might be due a retracement back to $16 on wed/thu?
Well thats what I am hoping for anyway.
Also it hinges a little on the POG too which is holding steady over 1400 usd currently. Any weakness in conjunction with a poor QR might see a sizeable drop later in the week.
Thoughts?
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Big increase in NCM today - up 6.6%. Does any one have any thoughts as to why? I can't find any related news of interest. The gold price is still stuck around $1460 . Just doesn't seem to be a reason for it.
Can someone please explain.
During 2008/2009 the POG on average was around $1000oz and Newcrest sp on average was around $30.
2008/2009 NCM= $30 GOLD= $1000 (on average)
2013 NCM= $15 GOLD= $1390
Has the cost of production risen that much??? What other factors are there for this?
During 2008/2009 the POG on average was around $1000oz and Newcrest sp on average was around $30.
2008/2009 NCM= $30 GOLD= $1000 (on average)
2013 NCM= $15 GOLD= $1390
Has the cost of production risen that much??? What other factors are there for this?
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Gold mining shares are on the nose generally and every man and his dog is piling their money into dividend stocks like the banks and telstra. So if you are a bit of a contrarian like me buy some NCM while the rest of the crowd isn't. I've been doing that recently. NCM could still go a bit lower before it recovers but I will just keep buying. I love buying when the mainstream is ignoring compelling value and I am willing to wait for the value to be resurrected.
pixel
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Check the AUD. At 70cUS, a pog of $1000US/oz is still more in AUD than $1400US/oz at parity.
Add the increased red tape, environmental laws, and increased labour cost (in AUD!), and the price drop is becoming much less of a surprise.
Thanks pixel.. Forgot about the AUD @ 70c back then. Still it looks fairly attractive at the current price considering NCM 40 year mine life.
I guess it comes down to where gold is heading atm and while the US markets are looking stronger along with the greenback I say there'd be more cheaper sp to come with the likes of NCM.
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Exchange rate is still only part of the story. There was also share dilution from ~480 mln in 2009 to ~760 mln now but that was connected with the acquisition of Lihir, for which they paid too much at the time and the then shareholders took the hit. But consider some more statistics:
Net assets ($billion): 2009/ 4.3 , 2013/ 15
Gold production(million oz): 2009/ 1.63, 2013/ 2.0
Revenue (A$/per oz gold): 2009/ 1552, 2013/ 1900
Levered free cash flow ($million): 2009/ -390, 2013/ -440
Levered free cashflow excluding expansion capex ($million) 2009/ 265 2013/ 910
Price over book value: 2009/ 3.36, 2013/ 0.8
(Note: above numbers for 2013 are my own projections for the 2012/13 financial year based on reported Dec-13 first half results and of course opinions can differ)
What I see is a company which in past years has eroded share holder value and chased expansion at the expense of returning cash to shareholders. But they are now reaching the end of a major expansion phase after which production will ramp up. They have excellent long term mine life and cash generating potential provided they bring costs under control and they are under enormous pressure to do so. My conclusion is that with the drop in gold price and negative sentiment the share price is now grossly undervalued and is a screaming buy. But current buyer's will need to have patience and of course no-one can pick the exact bottom.
Net assets ($billion): 2009/ 4.3 , 2013/ 15
Gold production(million oz): 2009/ 1.63, 2013/ 2.0
Revenue (A$/per oz gold): 2009/ 1552, 2013/ 1900
Levered free cash flow ($million): 2009/ -390, 2013/ -440
Levered free cashflow excluding expansion capex ($million) 2009/ 265 2013/ 910
Price over book value: 2009/ 3.36, 2013/ 0.8
(Note: above numbers for 2013 are my own projections for the 2012/13 financial year based on reported Dec-13 first half results and of course opinions can differ)
What I see is a company which in past years has eroded share holder value and chased expansion at the expense of returning cash to shareholders. But they are now reaching the end of a major expansion phase after which production will ramp up. They have excellent long term mine life and cash generating potential provided they bring costs under control and they are under enormous pressure to do so. My conclusion is that with the drop in gold price and negative sentiment the share price is now grossly undervalued and is a screaming buy. But current buyer's will need to have patience and of course no-one can pick the exact bottom.
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Something else is relevant - 'of Gold', i.e Per Oz of Gold.
NCM also produces copper and silver and therefore has other revenue.
So to get the full picture you have to examine all sources of revenue and of course all costs.
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I'm slowly learning the ropes to value investing. NCM does seem like good value. With strong assets.
However, it does seem a bit speculative aswell as its earnings are closely tied to gold value.
However, it does seem a bit speculative aswell as its earnings are closely tied to gold value.
Sean K
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A key factor is the cost of production and the price of gold. At the moment they are heading in opposing directions. It's speculative in the sense that there's no guarantee of that factor reversing. Gold bugs v Gold sceptics. Choose your corner.
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I last topped up my NCM holdings at $15.03 a few days after two NCM directors added to their own holdings when the price was $17.50. Insiders usually have a keen idea what their company is really worth so presumably they thought $17.50 was a good buy. I thought $15.03 was an even better buy but here we are today and the price has closed at $14.56 after reaching a low of $14.28.
Where is this going to end up?
Is there a chartist out there?
Where is this going to end up?
Is there a chartist out there?
chops_a_must
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I wouldn't be short.
But it is still lacking some stopping volume.
But it is still lacking some stopping volume.
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So far today back up 0.84 already. Is this now the bottom? Where are the chartists when you need them most? Jimbowan, what’s your take on NCM at the moment?
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well if gold price drops again wouldn't ncm drop again.
i guess it would be more important to get an idea of if gold price has plateaued from a technical point of view.
i guess it would be more important to get an idea of if gold price has plateaued from a technical point of view.
Must be out shopping for saucepans or female undergarments.
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Okiishi, I gather you have been lurking in the TLS thread. I'm still hopeful tha when they have finished their shopping they can find time to conjure up a chart or two for NCM.
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Starting to look interesting now, although the sellers are still in charge?
Down 65% in 8 months = good enough for me - got some buy orders in.....
Looking for gold equities to indicate gold has bottomed?
Down 65% in 8 months = good enough for me - got some buy orders in.....
Looking for gold equities to indicate gold has bottomed?
