Please note this is only an opinion and not financial advice. Direct stock investing is subject to business and market risks. Therefore, it’s highly recommended to do proper risk management and your own due diligence before investing.
Growth Stock Analysis as of 09 December 2023
Top Growth Stock
NYSE: Newmont Corporation (NEM)
- The company owns world-class gold reserves and resources, as well as extensive exposure to silver and copper.
- After merging with Newcrest Mining, Newmont has secured its position as the leading global gold miner, featuring a substantial roster of Tier-1 mines.
- Newmont stands out as the top blue-chip choice in the gold mining space.Â
- Newmont presents an attractive investment opportunity with a favorable valuation compared to its peers, along with historical benchmarks, supported by a robust dividend yield.
- Newmont Corporation engages in the production and exploration of gold. It also explores for copper, silver, zinc, and lead.
- The acquisition is anticipated to yield substantial post-acquisition synergies and enhance operating leverage for Newmont.
Shareholding Patterns of Newmont Corporation (NEM):
| Holder | Shares | Date Reported | % Out | Value |
|---|---|---|---|---|
| Blackrock Inc. | 92,824,554 | Sep 29, 2023 | 11.68% | 3,627,583,740 |
| Vanguard Group Inc | 82,578,928 | Sep 29, 2023 | 10.39% | 3,227,184,657 |
| State Street Corporation | 37,465,034 | Sep 29, 2023 | 4.71% | 1,464,133,597 |
| Van Eck Associates Corporation | 32,625,855 | Sep 29, 2023 | 4.10% | 1,275,018,473 |
| Deutsche Bank Aktiengesellschaft | 18,438,706 | Sep 29, 2023 | 2.32% | 720,584,664 |
| First Eagle Investment Management, LLC | 18,281,003 | Sep 29, 2023 | 2.30% | 714,421,630 |
| Charles Schwab Investment Management, Inc. | 17,003,452 | Sep 29, 2023 | 2.14% | 664,494,935 |
| Geode Capital Management, LLC | 14,863,767 | Sep 29, 2023 | 1.87% | 580,876,041 |
| Flossbach von Storch AG | 14,180,028 | Sep 29, 2023 | 1.78% | 554,155,520 |
| Morgan Stanley | 10,906,559 | Sep 29, 2023 | 1.37% | 426,228,345 |
List of Newmont Corporation peers:
What we think are pros of business:
- Newmont (NEM) offers a potential upside, having lagged behind sector peers in the past year with a 11% decrease in shares.
- Newmont, with substantial gold reserves (327 million ounces) and an annual production of 8 million ounces, has emerged as a leading global producer of silver (1.2 billion ounces) and copper (350 million pounds annually) by the end of 2022.
- Newmont expects to deliver significant post-acquisition synergies from increased production, leading to enhanced operating leverage and lowering its AISC over time.
- Newmont is a “must own” in nearly every portfolio, especially those with decent weightings in precious metals
- The company plans to assess its entire portfolio with the goal of realizing at least $2 billion in cash improvements through portfolio optimization in the initial two years post-closure.
What we think the risks are:
- Newmont faced challenges in Q2, experiencing reduced output, lower margins, and weakened free cash flow generation.
- Newmont is overvalued based on conservative NAV valuation but offers a 63% margin of safety at $1800/oz gold prices.Â
- Investing in gold miners typically entails seeking an asymmetric bet, but this doesn’t align with the profile of NEM.
- Generous dividends alone aren’t reason enough to invest in gold miners. For reliable cash flows, REITs and bank stocks may be more suitable.
- Despite a potentially positive gold price cycle as the Fed nears the end of its hiking phase, prominent gold miners like NEM have not experienced a clear upward re-rating in valuation.
Fundamentals:
- Market Cap: 45.04 Billion
- Revenue: 11.06 Billion
- 52 Week Range: 33.59 – 55.41
- Dividend: 1.60 (4.09%)
- PE: – 38.43
Technical for a long-term perspective:
- This stock is giving a trendline breakout on the weekly charts and it is preparing for a big upside rally.
- After a breakout one weekly candle is a pullback candle and it will shoot up towards 50 levels in the short-term.
- Reversing from the very strong support zone as shown in the chart with rectangular images.
- If you want to trade with more confirmation then enter into this trade above 42 levels.
- Sky blue line is its 200 Day EMA line, after breaking that EMA levels it will run up very quickly.
- The levels from where this stock is reversing is the great support zone of last several years.
- Our first targets will be around 55 and then it will hit 70 levels within next few months.
Entry = 41
Stop Loss = 33
Target = 55 / 70 / 90
Our Final Thought:
NEM is more suitable for income-minded investors who seek exposure to higher gold prices but are also looking for parabolic risk rewards as the current levels. Upon the completion of the Newcrest acquisition, Newmont is poised to become a major player among gold miners, with a projected 30% growth in annual production to reach 8 million ounces. Despite offering a substantial discount based on NAV calculations at a spot price of $2000/oz and providing generous dividends with solid yields, prudent investment requires more than dividends and a margin of safety.
I am keen to observe how the Newcrest acquisition will contribute to Newmont’s production growth before making a final decision. I believe the current levels are appropriate for NEM investors to add exposure.
Please note this is only an opinion and not financial advice. Direct stock investing is subject to business and market risks. Therefore, it’s highly recommended to do proper risk management and your own due diligence before investing.
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