The current surge in precious metals prices has helped precious metals mining-based companies to regain their lost glory. Miners have a been the victims of retreating precious metals prices over the course of the past three years, but it looks like 2016 is showing some hope.
South African miners have benefited due to the weakening South African rand and the comparatively strong US dollar. Apart from this, Barrick Gold (ABX) has been the top performer among the components of the VanEck Vectors Gold Miners ETF (GDX). Barrick, Agnico Eagle Mines (AEM), and Randgold Resources (GOLD) have risen 27.3%, 7.6%, and 11.4%, respectively, on a 30-day-trailing basis.
These three have been some of the best performers during the past month and together make up 16.6% of the price changes in GDX. Above is a chart that shows the comparative price performance of ABX along with gold, indicated by the SPDR Gold Shares ETF (GLD) and compared to GDX.
Toronto-based Barrick Gold is currently among the top-performing assets in Canada and has regained its title as one of the best-performing precious metals mining companies. The company opted for many joint ventures and asset sales in 2015, further helping it to cut down on its debt.
ABX paid off almost $3 billion of $13.1 billion in debt in 2015 alone. The company will likely concentrate on its core mining business in the current year. Thus. there’s much optimism surrounding the stock.
Barrick Gold is currently trading at $9.66 per share. It’s currently at a 30% premium from its 100-day moving average price of $7.43. The analyst-predicted target price for ABX is $9.55. Thus, there is a small amount of overvaluation at its current price.