Gold Fields ADR (GFI)
Gold Field is a South African company operating mining operations in South Africa, Ghana, Australia and Peru. It also produces copper in Peru. It has a market capitalization of $11.92 billions.
GFI had a great year in 2010 moving up over 38% (gold was up 29%), but down close to 9% for 2011.
GFI has been tracking the price of gold pretty closely in the last 12 months and like many other miners had ran ahead of gold in the last 2 months only to correct back to a more natural valuation in 2011.
The technical picture is not as bad as some of the other miners (I rank it a 4). But it is still not a pretty picture. The stock recently breached its 50 day MA but the 200 day MA is 10% away at around $14.80. The stock has not retraced as much as many of the other miners.
With a P/E of 30.31, GFI is not cheap currently. But with a forward P/E of 10.69, a PEG ratio of 0.61 and projected earning growth of 28%/year over the next 5 years, there might be enough support for the current price and room to grow. However, net margins are some of the lowest in the industry and the dividend payout ratio at 25% is also one of the highest (the dividend is at 0.95%).
Goldcorp Inc (GG)
Goldcorp is one of the largest miners with operations in Canada, USA, Mexico, Central and South America. In addition to gold, they also produce silver and copper in many locations so not necessarily a pure gold play.
Compared to the other miners, GG had a very subdued 2010, going up only 17%. And the stock is down 11% for 2011. In effect, it had none of the 2010 run, but a full 2011 correction. Not the best of combination! And GG also produces silver which had a better run than gold...
GG was tracking the price of gold in the first 6 months of 2010, but the last 6 months have shown and large divergence (more than 15%).
Technically speaking, GG is hurting (I rank it a 2). The price has breached every support point and the next (weak) support level is at $40. The next "good" support point is at $38. All the indicators are pointing south with no sign of recovery. The last 2 trading days have actually been quite brutal!
With a P/E of 22.55, GG is cheaper that the average gold miner (small consolation) but its forward P/E of 20.71 outlines what the main problem is for GG - slower growth. It is projected to grow earnings only 5%/year for the next 5 years. On the other hand, it has the highest net profit margins in the industry. But the stock is extremely volatile and might see further weakening.
Gammon Gold Incorporated (GRS)
Gammon Gold operates silver and gold mines in Mexico. It has a market capitalization of 1.12 billions therefore, one of the smaller miners in this analysis.
2010 was not a stellar year for Gammon as the stock went down 25% (yes, down). At one point, it was down close to 50%. Some labor issues at one mine seemed to have a big impact in the second quarter and the company actually reported a $1.30/share loss. It has gone down another 5% this year.
Not surprisingly, GRS has not tracked the price of gold during the last 12 months!
Technically speaking, the stock seems to be recovering somewhat. The price is over the 50 day MA and the 200 MA at this moment. I rank it a 7, the highest ranking of all the stocks in the analysis. The stock seems to be stuck in a narrow margin between $7.50 and $8.50 for the last 3 months!
It is obviously hard to price a stock with a negative P/E (-6.91) but the forward P/E is a very reasonable 11.49. Net profit margins stand at -66.88%, but once again, not a reliable number this year. The biggest concern is that earnings growth over the next 5 years is projected to be only around 5%/year. But they have recently reported better results at 2 of their mines and 2010 problems seem to be behind them. We'll see!
Harmony Gold Mining ADR (HMY)
Harmony Gold produces gold mainly from South African operations. They have a market capitalization of 4.86 billions.
Harmony had a decent 2010 with a 23% run. However, it has given back half of that gain with a 11% downturn in 2011. As with many of these stocks, HMY is extremely volatile!
HMY has lagged behind the price of gold for the last 12 months and opened some significant performance gaps as late as the last month.
No surprise, the charts are not pretty. The price is below the 50 day MA and the 200 day MA is only about 2 or 3% away! But both MA are (barely) positive. On the other hand, due to the great volatility of the stock, there is not great level of support. I rank it a 3.
Needless to say, the current P/E of -222 is not representative of the stock price (merely the 2011 trend!). But the forward P/E of 8.96 is the best of all the miners in this analysis. Net profit margins stand at -0.13% which is also an aberrational number as far as I can tell. On the other hand, projected earnings growth for the next years stands at an excellent 28%. HMY has a recent history of bad earning surprises (it is also followed by few analysts) so it would be prudent to wait for the next earning cycle and get more guidance.
Fundamentals comparison table
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