Sunday 22 April 2018 | ShareProphets: The one stop source for breaking news, expert analysis, and podcasts on fast-moving AIM and LSE listed shares
It isn’t often that I look at shares in a FTSE100 company and can easily see a very high chance of a 25% or more gain in share price over the coming months.
I know, I know, you have bigger matters to worry about with the current bout of stock market volatility impacting your wealth. It impacts mine too - especially the 6% fall of my largest holding Randgold Resources (RRS) after a full year results publication that saw record production, lower cash costs, fantastic grade, super sounding prospects... I could go on but regular readers know that I have an almost perma love-up with the FTSE-350's largest pure-play gold producer.
I know, I know...I do have a bit of a perma love-up with Randgold Resources (RRS), London's largest listed gold company but as it is a year since I wrote my latest paean I felt an update was overdue following last Thursday's numbers.
I have been a fan of Randgold Resources (RRS) for a long time and the latest update from the company continues to support my bullish view here.
When it comes to picking a company which is going to perform well over the course of a year, I believe that you need to consider the macro-economic factors that are likely to affect the sector in which it operates.
It was a real rollercoaster ride for precious metals and shares last week, following the results of the US elections and a surprise win for Donald Trump, but this could present some great buying opportunities.
Gold has been showing signs of weakness but I am yet to be convinced that this is justified and I think the market has over-reacted, which means that there are some good opportunities around for gold bulls.
Too many years ago to remember I recall one of my University lecturers observing that ‘life is a trade-off problem’. He was highlighting some tedious point about microeconomics, but I have a bit of a personal quandary at midday: should I review the latest interest rate and inflation information dump from the Bank of England (‘Super Thursday’) or listen to the Randgold Resources (RRS) quarterly conference call?
Hello Share Squeezers. Many writers on this stunning website continue to support gold. This is not surprising as nearly all my fellow writers are very bearish on stocks at the mo, even more growly than normal.You could spread bet the price of gold. Or you can buy one of the miners.
Hello Share Polishers. They tell me that all the gold in the world is only enough to cover a football pitch. Though nobody informed how deep the deposit should be. TW Note: It is actually "fill an Olympic sized swimming pool."
With turmoil on markets across the world, gold has seen a resurgence in popularity since the start of the year. It was as recently as late autumn of 2015 when many seemed to be predicting that gold would drop below the $1,000 area, and could possibly even go as low as the $800-850 range.
With the markets in turmoil it makes sense to have at least something more defensive in your portfolio. Gold has historically always been good in this type of situation, and whilst I’m nowhere near as bullish as some are about where the gold price is going longer term, it should at least offer some protection over the coming months.
I actually was not going to write-up Thursday’s quarterly update from the world’s best larger cap gold mining stock Randgold Resources (RRS). The numbers showed good progress: rising production at an attractively low cash cost, a building net cash balance and exciting prospective exploration development opportunities.
“Toast”. I nearly spat out my breakfast when I heard the CEO of Randgold Resources (RRS) use that word to describe the majority of his competitors in the gold mining space at prevailing commodity prices.
As the long-awaited Grexit looms ever larger, the price of gold could well be priming itself for a strong summer rally. Currently at $1,167/oz., the precious metal is trading at the bottom of its annual range and sentiment towards it is decidedly bearish. These are prime conditions for a contrarian reversal and if the Greek crisis intensifies over the coming weeks, gold should benefit greatly from any flight to safety. Such a move higher in gold will be positive for the battered gold miners and chief among these Randgold Resources (RRS) looks an appealing buy.
A month or so ago at the UK Investor Show I sat on a panel with Ed of Stockopedia and Thierry the technical guru in a screens versus technicals versus fundamentals debate which you can watch here. To cut to the chase my view would be that whilst you should not close your mind off to anything the key for choosing investments for me are fundamental factors like cash flow, selected earnings indicators, the signalling around shareholder remuneration (dividends, buybacks etc) and management credibility and commentary. In short some science (balance sheet), some art (reading primary company documentation) and a slug of psychology appraising the words and actions of management.
Although it is evident on the daily chart of Randgold Resources that this is a stock which is quite happy to turn on a dime, the current chart configuration where we have seen a break below the 200 day moving average at 4,688p does seem to be one where the bulls will have to struggle to escape the negative technical setup.
A very pleasing set of numbers from Randgold Resources (RRS) earlier this week confirmed that it is clearly the best larger cap gold company in the world. The Q4/FY update reinforced its consistent achievement of the gold sector’s holy trinity of rising production/grade, all in cost control way under spot gold prices and a solid balance sheet (in its case now with net cash on it).
Gold has been the despair of its fans ever since hitting $1,900 an ounce three years ago. Instead of soaring above $2,000 and on into the stratosphere, amid international political and economic turbulence, the perverse yellow metal has slithered back to below $1,180 an ounce, as the US economy and dollar have proved unexpectedly strong and oil has lately taken a spectacular tumble.
A year ago I tipped Randgold Resources (RRS) as my ‘FTSE-100 tip of the year’ and despite the volatility in the underlying gold price and desperate performance of the average gold miner the tip has done well and has nicely outperformed the UK’s leading share index.
According to the excellent ShareProphets website search functionality it is over 140 days since I wrote a piece titled ‘Update on 8 share tips’. In the spirit of continued openness and accountability, how are these eight tips looking and what would be my view now?
I have always taken the view that the route to success in stock picking is ‘90% perspiration and 10% inspiration’. Timing and honesty matter as well. Bringing all this together how are my eight tips from December and January looking?
Gold divides opinion like few other investments. For some it is the tried-and-tested physical base upon which all monetary matters rest, for others it is an investment ‘relic’ with little relevance in today’s world.