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Two Ways to Play: Newmont Digs Up Big Profits

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Strengthen your portfolio in good times and bad.

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Newmont's Profit Soars

Big beat by Newmont Mining (NEM) this morning. The largest US gold miner reported fourth-quarter earnings of $1.13, which was $0.34 better than consensus estimates of $0.79 a share. Revenues rose 90.0% year-over-year to $2.52 billion above estimates of $2.06 billion.

The company stated in the press release, "The combination of slightly higher production, lower costs, and gold price leverage generated cash flow from operations of $2.9 billion on record revenues of $7.7 billion, while our gold operating margin expanded to 57%."

The company also said gold reserves increased 8% annually in 2009 while copper reserves rose 17%.

From the Bull Pen: If you're bullish on gold, these miners should outperform the yellow metal. For NEM, a sell stop can be set below the recent low ($46). Also consider ASA Limited (ASA), which may be a good risk/reward setup. A sell stop can be set below the recent low ($66). But one caveat is that it's such a thinly traded stock so keep that in mind and adjust the position size accordingly.

From the Bear Cave: Bears might be thinking that there's more downside for commodities and commodity-related plays -- like the emerging markets ETF (EEM) -- especially if these sovereign debt issues are a sign of more trouble to come. For EEM, a buy stop can be set near $39-$40.

For more ways to play and other trading ideas from more than 30 top market pros, take a free trial to our Buzz & Banter.

A Quick Check Around the World

Asian trading closed with the Nikkei -0.95%, India -0.01%, Hang Seng -0.33%, Shanghai 1.27%, and Taiwan -1.36%.

Across the pond, we see the FTSE 0.01%, CAC -0.29%, DAX 0.18%

As of 8:30 AM EST, S&P Futures are trading -10.75 to 1093.00. Nasdaq futures are -10.00 to 1804.00.

A Look at Commodities

Over in commodities, crude oil is -1.35 to 78.65 while gold is -4.400 to 1093.20 this morning. Silver is -0.178 to 15.775 and copper -0.0530 to 3.2005.

The dollar Index is -0.0700 to 80.8400.

On the Radar

Economics

Initial Claims 496K vs 460K consensus, prior revised to 474K from 473K
January Durable Goods Orders +3.0% vs +1.5% consensus, prior revised to +1.9% from +0.3%
January Durable Goods ex-trans -0.6% vs +1.0% consensus, prior revised to +2.0% from +0.9%
Continuing Claims rises to 4.617mln from 4.611 mln

10:00 FHFA Housing Price Index

Click here for the full trading radar.

Good luck today!
Position in NEM

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