Today’s Correlation Study of Key Mining Stocks with Gold
The Global X Silver Miners ETF (SIL) and the Sprott Gold Miners (SGDM) have fallen 3.5% and 4.4%, respectively, on a 30-day trailing basis.
Sibanye, Gold Fields, Barrick, and Iamgold have call implied volatilities of 48.1%, 37.3%, 24.8%, and 40.4%, respectively.
New Gold and Coeur Mining have seen YTD losses of 14.3% and 22.3%, respectively, while NEM and SLW have seen YTD gains of 1.5% and 8.1%, respectively.
Gold (GLD) and silver (SLW) are stable in the early hours today amid weakness in the US dollar and a lower global risk appetite.
On December 12, 2017, Huntsman’s (HUN) one-year forward PE (price-to-earnings) multiple stands at 13.30x.
At the end of 3Q17, Huntsman’s interest expense stood at $134 million as compared to $153 million in 3Q16.
The analyst consensus target price for Huntsman is $37.55, which implies a return potential of 20.9%.
Huntsman’s (HUN) debt has been on a declining trend ever since it peaked at $5.2 billion in 2014.
Valuation multiples help investors understand various headwinds and tailwinds the market is pricing into a company’s stock price.
Among all the iron ore miners as well as US steel stocks, Cleveland-Cliffs (CLF) has given the most negative return in the trailing three months, amounting to -19.5%.
China’s property sector is one of the most steel-intensive sectors, consuming approximately 50% of overall steel in the country.
Since China is the biggest consumer of seaborne iron ore (COMT), investors looking for clues about iron ore prices should track Chinese iron ore demand.
The volatility in the iron ore prices that characterized seaborne prices in 2017 is still continuing. While prices peaked at $95 per ton in February and hit a bottom of $53 per ton in July, they’ve been in the stable range of $63–$68 per ton lately.
Steel prices are the major driver of steelmakers’ earnings and revenues. So it’s important for steel investors and Cleveland-Cliffs (CLF) investors to track the trend in steel prices.
Demand for the product in any sector is the driving force behind the production growth and outlook. Similarly, in the US steel sector, demand for steel drives the revenues for US steelmakers’ (SLX) revenue.
US steel production (SPY)(SPX) is the major revenue driver for US steelmakers (X). This data point is released every month by the World Steel Association (or WSA).
The US (DIA)(DOW) iron ore segment contributes to most of Cleveland-Cliffs’ (CLF) revenues. Domestic US steelmakers are the main customers for this segment’s iron ore pellets.
The US steel sector (SLX) has seen its fortunes reverse in 2017 after the initial euphoria from the “Trump trade.”
In this part of the series, we’ll analyze mining stocks’ price movements in relation to their moving averages.
B2Gold, Goldcorp, Newmont, and Agnico-Eagle have call-implied volatilities of 54.8%, 25.7%, 21.9%, and 24%, respectively.