NCM - Newcrest Mining

[Sean K]

Looks like it might be breaking up for whatever reason.

Still has to clear 29.50..........

Then, I have no idea.....

Breaking up, all time intraday high touching $30.27, needs to close above 29.50 for confirmation still. Hopefully those pennant targets get hit, but I'm still nervous of a rapid US sell off, so not adding any more to my position right now.

(delayed chart not showing the break yet)

 

[Sean K]

LGL and NCM running away with the flight to safety and gold certainty.

NCM now consolidating just under $34.00 which was a TA price target from the breakout from the last consolidation. I wouldn't be surprised for some consolidation now between here and $28-$30, which might equate to natural consolidation with POG.

My only regret is that I have expected more consolidation sooner and I have not made the most of this seemingly obvious run to ath's.

 

[Sean K]

I'll just continue my little monologue here.

1512 [Dow Jones] Newcrest (NCM.AU) down 1.8% at A$32.80, hits A$32.55 in thin trading after setting record high of A$33.95 in early trade. With spot gold strong - now US$808.90 after hitting 28-year high of US$811.65 overnight - Newcrest should also be well supported, given its recent unwinding of gold hedge and cheap PE rating versus global peers, which gives takeover potential from Newmont or Barrick Gold. Daily chart has formed bearish key reversal pattern, suggesting a few days of weakness possible. However, there's no need for alarm while it remains above daily uptrend line and Oct. 31 trough A$30.88. Traders can stay long with trailing stop below A$30.88, targeting bullish pennant target at A$35.00. (DWR)

Bearish key reversal pattern? Has rejected $34.00 ish a couple of times, but key reversal?

The target from the pennant was $34.00 ish, which was hit.

Time for some consolidation back to those support lines perhaps, but with POG running through $820....

 

[nizar]

Bearish key reversal pattern? Has rejected $34.00 ish a couple of times, but key reversal?

The target from the pennant was $34.00 ish, which was hit.

Time for some consolidation back to those support lines perhaps, but with POG running through $820....

Well I agree with you, target from pennant was hit.
But damn, that pennant/flagpole looks so textbook ey... Always the case in hindsight though

POG $824 now

Reminds me of the January-April days of last year. Damn those were good times. THen along came May

 

[Sean K]

Ugly double top formed, a break through $32 gives me a target of $28. This may coincide with a possible correction in POG. POG breaking down through $790 may precipitate it.

Having said that, I'm expecting the Fed to lower rates in Mid Dec which will support POG and may even be the impitus for the next up leg. Or, it may be factored in...

I'm long long NCM and LGL but am considering shorting POG and maybe a CFD on NCM as a hedge. Any other suggestion on how I can save and/or make money welcome.

 

[Sean K]

Well I agree with you, target from pennant was hit.
But damn, that pennant/flagpole looks so textbook ey... Always the case in hindsight though

This was called before the break on 10 Oct. :

If POG does consolidate above this level perhaps the pennant, which looks to have formed pretty nicely, will break to the up.

And I did trade it. : See blog.

Haven't taken profits though, so who knows if it's going to be a good investment.

 

[Sean K]

Ugly double top formed, a break through $32 gives me a target of $28. This may coincide with a possible correction in POG. POG breaking down through $790 may precipitate it.

Well, POG hasn't broken down but NCM looks to be dipping just under $32 intraday possibly confirming double top. Will be shorting it on confirmation EOD.

 

[M34N]

Anyone got any news on the supposed "media report that it could be the next big takeover target"? According to Sky News this was the reason for it's 2% rise today but its nothing compared with its lows of $28.99 from just over 2 weeks ago!

 

[Sean K]

Anyone got any news on the supposed "media report that it could be the next big takeover target"? According to Sky News this was the reason for it's 2% rise today but its nothing compared with its lows of $28.99 from just over 2 weeks ago!

Could have been the reason for the outperformance the past few days. Up 10% yesterday, one of it's biggest daily rises I think. Damn I wish I could post a chart. You should see the smile on my face...he he I have been predicting an NCM and LGL merger if one of the big goldies don't take either of them before hand. With POG running they may have missed an oportunity.

 

[Sean K]

Anyone got any news on the supposed "media report that it could be the next big takeover target"? According to Sky News this was the reason for it's 2% rise today but its nothing compared with its lows of $28.99 from just over 2 weeks ago!

This rumour was reported all over the place the past few days, but like the last 38 previous rumours I suspect it to die down. (fingers crossed for a takeover though)

One from Mineweb:

Newcrest, Australia's last big gold gun a takeover target?

The rumour machine cranked up in the holiday lull today to claim that Newcrest, the only surviving Australian-controlled gold producer of size, was in the gunsights of one or all of the three big international producers already operating in the country.

Chart wise, it's been running pretty close to plan. The double top identified earlier played out and it almost hit the target before POG broke out. Now, with POG breaking up again, perhaps this little pennant will play out? I'm not sure how much more gold has to run in the short term though. I think a US interest rate reduction (25 pts) is factored in now and the Iran thing will blow over. And I don't think oil can stay at these levels for too much longer. All these factors may mean POG hits a wall shortly and consolidates for a while. Maybe. So, while there is potential for gold upside with maybe a 50 point reduction, Middle East boiling over, and any oil shocks, I think the short term upside here is more from M&A speculation.

 

[M34N]

Hey kennas,

Yeah this one has been a real gem lately, I proudly bought into this at $29.40 a few weeks back, needless to say I'm happy with its rise!

Strangely, this stock is now dearer than NAB shares, and is more expensive now than BHP (although by 8 cents only). Who would of picked that a month ago?

The volume has been extremely high again today, but I think it may be time to take profits on this, its had too big of a run lately and with the market the way it is lately, not worth the downside risk.

 

[Sean K]

Hey kennas,

Yeah this one has been a real gem lately, I proudly bought into this at $29.40 a few weeks back, needless to say I'm happy with its rise!

Strangely, this stock is now dearer than NAB shares, and is more expensive now than BHP (although by 8 cents only). Who would of picked that a month ago?

The volume has been extremely high again today, but I think it may be time to take profits on this, its had too big of a run lately and with the market the way it is lately, not worth the downside risk.

Good work on the buy M34N (funny name that). Any profit's a good profit, so if you lock it in good stuff. I've held this for over 6 years and been buying and selling on the way. Haven't taken any off the table for some time though, as I've thought the longer term rise in POG was a pretty high probability. The recent run in POG looks pretty sharp to me, although the semi log chart posted in the gold thread shows that it's just trending up nicely and may not be overbought. I'm still holding on for the takeover at a 30% premium and subsequent bidding war....

PS, in regard to being 'more expensive' I think you need to look at market caps to judge that, not just the sp. Plus, 'more expensive' infers value. Might have to look at forward p/e and the like to start talking value.

 

[Timoshev]

Am I right to think earnings will be up following the dehedging - and could give things a wee kick? When is the next finanicial report?

 

[Sean K]

Am I right to think earnings will be up following the dehedging - and could give things a wee kick? When is the next finanicial report?

Now they've cleared the hedge book, you could rightly assume that profits will be significantly enhanced by the leap in POG. If cash costs were around US$200 for the group and they had $500 ish locked into their long term contracts and it's now at $900, that is more than double the profit. I have just plucked these figures as an example and am trying to find the facts. It's MC is running away at the moment and p/e must be looking toppy, but I suppose that's just due to recent POG movements, and takeover rumour. Might be too late for a major to take it now....

 

[Sean K]

Gold flying and NCM slides off 3%.

Going out in sympathy with the market, profit taking, or increased Telfer costs a concern? Those costs are a little concerning to me as I was thinking that the new CEO had turned things around. Time to start using both sides of the writing pad NCM!

 

[kengaikl]

Gold flying and NCM slides off 3%.

Going out in sympathy with the market, profit taking, or increased Telfer costs a concern? Those costs are a little concerning to me as I was thinking that the new CEO had turned things around. Time to start using both sides of the writing pad NCM!

I thought today it will be only of only few stocks to rise. Imagine if the price of gold actually fell instead of breaking record prices they'll probably be down 10%

Crazy times we are in.

 

[56gsa]

anyone hear the story behind todays rise - only a presentation released which wouldn't be enough in itself...

 

[Sean K]

anyone hear the story behind todays rise - only a presentation released which wouldn't be enough in itself...

Gold rebounded strongly from yesterday's blip after the IMF may have been approved to sell some gold or something.

LGL ran away too, up 6% ish.

I didn't hear any takeover rumours that usually drive this.

(maybe because I was on the golf course all day )

 

[56gsa]

thanks kennas - 6% doesn't exactly equate to the gold increase - suggests maybe people are seeing gold run much higher perhaps.

broker sentiment not exactly brimming with confidence on this at these levels (targets range from $30 to $42) - but they're probably still to revise their gold forecasts

Merrill Lynch 20-Feb-08 1 Buy, High Risk $41.00 7.9%
Profit of $207.9m was in line with the broker's forecast so there is no change to its positive view given the outlook of production growth and reserve increases.

JP Morgan 20-Feb-08 3 Neutral $36.50 - 3.9%
It cost a lot more to close out the hedge book than the broker anticipated, undermining an otherwise good operating result. And there still some more forward sales to kill before September.
The broker has nevertheless raised FY08 earning by 9% and the target from $28 to $36.50 which, although unstated, look's like a gold price catch up more than anything else. Beware the A$.

UBS 20-Feb-08 1 Buy $42.00 10.5%
Operationally the result was in line with the broker's forecast and to reflect a one-off tax benefit the broker has lifted its estimates by around 4%.
The growth outlook supports the broker's positive rating and there is no change to its price target.

Credit Suisse 20-Feb-08 3 Neutral $39.00 2.6%
First half FY08 operating net profit for Newcrest Mining was reported as $207.9m, and the company appears to be on track across FY08 guidance according to the analysts.
Credit Suisse believes the company is seeking acquisitions and the broker has made no further changes to operating earnings forecasts or valuation at this stage.

Deutsche Bank 20-Feb-08 3 Hold $32.20 - 15.3%
The benefit derived fom closing out hedges has been undermined by the cost of doing so, and there's more to come. Thus the broker retaines Hold. Developments at Cadia and indicated M&A provide some upside.
The broker has reduced earnings in the short term but pushed them out in the long term. Target falls from $34.30 to $32.20.

ABN Amro 20-Feb-08 3 Hold $30.85 - 18.8%
Target $30.85 (was $30.11). Earnings were a little above the broker's forecast and results in a 5% increase in its full year estimates.
While the growth outlook appears good the broker retains its view the stock is fair value at current levels, so there is no change to its Hold rating.

Macquarie 20-Feb-08 3 Neutral $34.00 - 10.5%
The highlight for the broker is the strengthening of Newcrest's balance sheet, with little gearing and a reduction in the hedge book. The broker admits it has underestimated the company's appeal and is still below consensus on forward gold prices, but Neutral retained on the valuation.

 

[Sean K]

thanks kennas - 6% doesn't exactly equate to the gold increase - suggests maybe people are seeing gold run much higher perhaps.

Yes, agree to some extent. However, these things overreact to gold going extreme levels one way or the other too. Gold down 2%, I think NCM/LGL fall 4-6% with it, pending other usual downgrades. It's an odd correlation. You may be correct with the perception of further rises though. The bounce off 930 ish might have been the trigger for punters to stay long. Now need 945 to hold and NCM should have another good one. Imagine if NCM and LGL had have been bringing out upgrades??