New thread to discuss one of the majors.
This is one of the senior producers, paying a dividend, with international exposure and a great resource base. Why is it suffering valuations at half of what they were three years ago. They are proving up their holdings and have a solid production record and good management.
My guess is that they are indexed and general sell-offs in the equity market will sideswipe them due to their inclusion in major funds that require large cap companies that pay dividends.
Does anyone else have more information on the company, like hedged forwards that are keeping the prices consistently down? Or is this just a decent deal that is being overlooked.
I think it is a combination of things. I think the current bad price action is due to the calls that expire tomorrow. There are also calls in July that will act as resistance unless it can get substantially above them. Then they will act as an accelerator to the upside. There are 8700 calls at 16 and 36,600 at 17 for tomorrow. There is no way that the stock closes above 16 tomorrow. I expect it to close below 15 or barely above 15. However, on Monday and for the rest of next week, it should really go up nicely. There should be a good amount of short covering for the next month in that stock. There are not many calls sold at all for July so I expect the stock to run up to 18 in the next month. For August though, there are 45,000 calls sold between 16 and 20. That is going to cause some selling beginning in August if gold isn't going up. It may cause selling anyway but if there are strong hand buyers, it could cause the stock to skyrocket to 22 or 23.
It's always hard to be sure about these things but the behavior of the miners the last couple of months seems like setup by the players that want to scoop them up cheaply. They are taking the chumps to lunch on the options and on their stocks as well.
wrs , can you tell us where you're finding the info on how many calls there are on these miners?
would be appreciated
I just use the Yahoo Finance data. If you click on the stock symbol you get the chart and the stats. The options are about the fourth item down in the left hand side bar. The top says More on XXX and down below that it says options. Just click on that to get detail on all the strikes for all the option months. It has puts and calls.
I believe there are many who think they way overpaid for Red Back Mining, I think it was $7.1 Billion. If you're buying for ounces in the ground though, I still think it's a good one to hold on to in the long term.
Strong volume of 9.8m shares and up $.75 on no news. That is pretty strong, more than it has done in months. Looks like someone is taking a position and maybe someone else was forced to cover some shorts as a result.
Before you buy the Kinross stock seriously consider buying either their warrant "C" or warrant "D" which expire in September 2013 and 2014 respectively.
I have written many articles on commodity-related long-term warrants (I seem to be the only one doing so) over the past 7/8 years and developed 2 proprietary indexes - the Gold and Silver Warrants index (GSWI) and the broader Commodity-related Company Warrants Index (CCWI). You can get all the details here:
1. The “Secret” World of Gold & Silver Company Warrants https://www.munknee.com/2011/05/the-secret-world-of-gold-silver-company-warrants/
2. Gold & Silver Warrants Index (GSWI) Update https://www.munknee.com/2011/06/gold-silver-warrants-index-gswi-update/
3. Buying Gold & Silver Company Warrants is Easy & Profitable – Here’s How (and Why!) https://www.munknee.com/2011/06/buying-gold-silver-company-warrants-is-easy-profitable-%e2%80%93-here%e2%80%99s-how-and-why/
Enjoy and profit.