Two Ways to Play: Newmont Digs Up Big Profits
Strengthen your portfolio in good times and bad.
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
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!
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter