NEW YORK (AP) — The price of oil dropped by nearly 3 percent Wednesday following disappointing economic news from the world’s two biggest oil-consuming nations, and U.S. crude supplies grew much more than analysts expected.
Benchmark oil for June delivery was down $2.72, or 2.9 percent, to $90.74 a barrel in morning trading on the New York Mercantile Exchange.
Oil fell initially after data from China showed a slowdown in manufacturing growth. An industry group in China released data Wednesday showing that manufacturing grew at a slower pace in April and export orders had been declining steadily.
“This ongoing trend of slowing Chinese economic growth will translate to some additional downward revisions in global oil demand expectations” when OPEC, the International Energy Agency, and the U.S. Energy Department issue monthly reports next week, said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates, in a note to clients.
The sell-off continued as weak U.S. economic data came in and the Energy Department said U.S. crude inventories expanded by 6.7 million barrels last week, nearly five times the increase analysts expected. The nation’s oil production, at 7.3 million barrels per day, is the highest it’s been in 20 years. Imports of foreign crude increased last week, adding to bulging supplies.
Hot Gold Companies To Watch In Right Now: First Majestic Silver Corp.(AG)
First Majestic Silver Corp. engages in the production, development, exploration, and acquisition of mineral properties with a focus on silver in Mexico. The company owns interests in La Encantada Silver Mine comprising 4,076 hectares of mining rights and 1,343 hectares of surface land located in Coahuila; La Parrilla Silver Mine consisting of mining concessions covering an area of 69,867 hectares; and San Martin Silver Mine comprising approximately 7,841 hectares of mineral rights and approximately 1,300 hectares of surface land rights located in Jalisco. It also holds interests in Del Toro Silver Mine consisting of 393 contiguous hectares of mining claims and an additional 129 hectares of surface rights located in Zacatecas; Real de Catorce Silver Project comprising 22 mining concessions covering 6,327 hectares located in San Luis Potosi state; and Jalisco Group of Properties consisting of mining claims totalling 5,240 hectares located in Jalisco. The company was founded in 1979 and is headquartered in Vancouver, Canada.
- [By Doug Ehrman]
While many precious-metals companies have been in a slump of late, there is one that belongs perpetually in your portfolio: Silver Wheaton (NYSE: SLW ) . The company is not like other miners — including Pan American Silver (NASDAQ: PAAS ) and First Majestic (NYSE: AG ) — in that it has a unique business plan that insulates it against many of the vagaries of the mining business. Moreover, because silver will always have a significant industrial demand component, even with the heightened volatility you see in the silver market, maintaining exposure to silver is appropriate.
- [By Doug Ehrman]
Despite the weakness seen in precious metals a few weeks ago, silver has been relatively stable ever since mid-April, with the iShares Silver Trust (NYSEMKT: SLV ) trading in a dollar-wide range ever since. With the presidents of the Chicago and Philadelphia Federal Reserve banksÂ releasing conflicting statements, turmoil may be just around the corner. Miners like Pan American (NASDAQ: PAAS ) and First Majestic (NYSE: AG ) are still facing operating challenges, while silver streaming darling Silver Wheaton (NYSE: SLW ) struggles as well.
- [By Doug Ehrman]
It is no secret that precious metals companies have been taking a pounding for some time now. The SPDR Gold Trust (NYSEMKT: GLD ) and iShares Silver Trust (NYSEMKT: SLV ) , the gold and silver ETFs, have been hard hit and operating companies like First Majestic (NYSE: AG ) and Barrick Gold (NYSE: ABX ) have been hit even harder. Through all of these struggles, and in some cases because of them, one precious metals company continues to look attractive for the long term: Silver Wheaton (NYSE: SLW ) .
- [By Doug Ehrman]
In terms of individual companies, there are several good choices, but these can behave very differently. Pan American Silver (NASDAQ: PAAS ) , for example, missed revenue expectations and beat earnings expectations in its last earnings release. But despite the beat, EPS shrank considerably from a year earlier on a GAAP basis. The stock has been fairly flat ever since. Conversely, First Majestic (NYSE: AG ) reported strong revenue growth and a small bump in profits, sending the stock higher since the announcement. First Majestic reported increased cash costs and tightening margins, largely driven by lower silver prices. Each of these companies faces pressure from increasing production costs and environmental concerns.
Hot Gold Companies To Watch In Right Now: CME Group Inc.(CME)
CME Group Inc. operates the CME, CBOT, NYMEX, and COMEX regulatory exchanges worldwide. The company provides a range of products available across various asset classes, including futures and options on interest rates, equity indexes, energy, agricultural commodities, metals, foreign exchange, weather, and real estate. It offers various products that provide a means of hedging, speculation, and asset allocation relating to the risks associated with interest rate sensitive instruments, equity ownership, changes in the value of foreign currency, credit risk, and changes in the prices of commodities. CME Group owns and operates clearing house, CME Clearing, which provides clearing and settlement services for exchange-traded contracts and counter derivatives transactions; and also engages in real estate operations. Its primary trade execution facilities consist of its CME Globex electronic trading platform and open outcry trading floors, as well as privately negotiated transact ions that are cleared and settled through its clearing house. In addition, the company offers market data services comprising live quotes, delayed quotes, market reports, and historical data services, as well as involves in index services business. CME Group?s customer base includes professional traders, financial institutions, institutional and individual investors, corporations, manufacturers, producers, and governments. It has strategic partnerships with BM&FBOVESPA S.A., Bursa Malaysia Derivatives, Singapore Exchange Limited, Green Exchange, Dubai Mercantile Exchange, Johannesburg Stock Exchange, and Bolsa Mexicana de Valores, S.A.B. de C.V., as well as joint venture agreement with Dow Jones & Company. The company was formerly known as Chicago Mercantile Exchange Holdings Inc. and changed its name to CME Group Inc. in July 2007. CME Group was founded in 1898 and is headquartered in Chicago, Illinois.
- [By Lee Jackson]
CME Group Inc. (NASDAQ: CME) exchanges offer the widest range of global benchmark products across all major asset classes, including futures and options. CME Group brings buyers and sellers together through its Globex electronic trading platform and its trading facilities in New York and Chicago. The company also operates CME clearing, one of the world’s leading central counterparty clearing providers, which offers clearing and settlement services across asset classes for exchange-traded contracts and over-the-counter derivatives transactions. Investors are paid a solid 2.5% dividend. The consensus price target is $81.54. CME closed Wednesday at $75.71.
- [By Marc Bastow]
Exchange-traded and over-the-counter derivatives trader CME Group (CME) raised its quarterly dividend 4% to 47 cents per share, payable on Mar. 25 to shareholders of record as of Mar. 10.
CME Dividend Yield: 2.47%
Hot Gold Companies To Watch In Right Now: Agnico-Eagle Mines Limited(AEM)
Agnico-Eagle Mines Limited, through its subsidiaries, engages in the exploration, development, and production of mineral properties in Canada, Finland, and Mexico. The company primarily explores for gold, as well as silver, copper, zinc, and lead. Its flagship property includes the LaRonde mine located in the southern portion of the Abitibi volcanic belt, Canada. The company was founded in 1953 and is based in Toronto, Canada.
- [By Ben Levisohn]
Gold miners are getting a boost today from solid earnings from the likes of Barrick Gold (ABX), Goldcorp (GG) and Agnico Eagle Mines (AEM). The exception: Kinross Gold (KGC), which missed earnings forecasts and cut its reserves.
- [By Charley Blaine]
Gold mining stocks are pretty much a disaster. Newmont Mining (NYSE: NEM) is down 50 percent in 2013. Agnico Eagle Mines (NYSE: AEM) is off 51 percent. The NYSE Arca Gold BUGS Index is down 56 percent.
- [By Patricio Kehoe] e, has cash costs of $912 per ounce, and Agnico Eagle’s costs do not even reach the $700 per ounce mark. Hence, it comes as little surprise that revenue has been decreasing steadily, since gold prices are hovering around the $1300 mark at best. As the company is hemorrhaging money, investment gurus the like of John Burbank and Seth Klarman have decided to sell their entire stake in the firm. I agree with this bearish stance, and recommend investors stay away from Kinross Gold.
Any Long Term Investment?
If you were to follow Jean-Marie Eveillard’s purchases, one would be inclined to see good growth prospects for Agnico Eagle, and thus believe in this stock’s potential. And, you wouldn’t be wrong, as the firm has been growing at a steady pace, with no end in sight to its expansion possibilities. However, with a 171% price premium, investors might be better off waiting until a more favorable entry-point is available. Nevertheless, as a long-term investment, I feel highly optimistic and would thus even consider paying the additional cost.
Disclosure: Patricio Kehoe holds no position in any stocks mentioned.
Also check out: Jean-Marie Eveillard Undervalued Stocks Jean-Marie Eveillard Top Growth Companies Jean-Marie Eveillard High Yield stocks, and Stocks that Jean-Marie Eveillard keeps buying John Burbank Undervalued Stocks John Burbank Top Growth Companies John Burbank High Yield stocks, and Stocks that John Burbank keeps buying
The Strategy of Ben Graham – Warren Buffett’s Mentor From 1923 to 1957 Warren Buffett’s mentor, Ben Graham, followed a strategy of investing in net-nets. He said: “It always seemed, and still seems ridiculously simple to say that if one can acquire a diversified group of common stocks at a price less than the…net current assets alone…the results should be quite satisfactory. They were so in our experience, for more than 30 years.”
Today net-nets are rare. They are collected under Gu
- [By Sally Jones]
The once-troubled Agnico Eagle Mines Ltd. (AEM) is hitting a new record for gold production in the third quarter at 315,828 ounces, according to the Financial Post, and the company’s executives are buying. Here’s a third quarter company update and a look at billionaire stakeholders of AEM, a stock that spiked 23.66% over the past five days.
Hot Gold Companies To Watch In Right Now: Goldcorp Incorporated(GG)
Goldcorp Inc. engages in the acquisition, exploration, development, and operation of precious metal properties in Canada, the United States, Mexico, and Central and South America. It produces and sells gold, silver, copper, lead, and zinc. The company was founded in 1954 and is headquartered in Vancouver, Canada.
- [By Richard Stavros]
Whereas in the 1970s there were limited ways to hedge against inflation, now there is a cornucopia of currency and international commodities instruments that can not only hedge against inflation but other global shocks, such as market bubbles and even war.
And it is these very scenarios that investors have been worried about. Since the beginning of the year, stocks, bonds and just about any investment you can think of have gyrated wildly at various times amid concerns of war, inflation and the possibility that the U.S. equity market is overvalued and headed for a correction.
In response, some market analysts in Bloomberg news reports have offered any number of wildly unsubstantiated statements for why investors should ignore today’s perils. They dismiss the danger posed by Russia’s annexation of Ukraine’s Crimea region (“Putin will stop short of other countries or war with the West”). They also argue that the Federal Reserve chairwoman misspoke (“Janet Yellen really didn’t mean a rate hike is coming soon. Inflation is under control. It was a rookie mistake”).
For my money, here’s the most outrageous: The Shiller Cyclically adjusted P/E metric which has predicted the 1929, 2000 and 2007 downturns doesn’t apply (“Suggests only a slightly expensive market with low to moderate returns going forward on average”).
With new records being set by the S&P 500 in the last few months, it stands to reason that some investors have not needed much convincing to stay all in and buying. This mindset has prevailed, even as the impact of a Russian war or conflict, runaway inflation or a market correction could be devastating to investor portfolios, taking years to recover.
If you’ve never thought of certain investments as “insurance,” it’s time to start now. Protecting wealth is as important as building wealth. And as previously mentioned, we have found that the Inflation Sur vival Letter’s Thri
- [By Daniel Gibbs]
Senior gold miners
Another way to profit from rising gold prices is to invest in the producers. One advantage that investing in mining companies can have over the purchase of physical gold is the ability to derive cash flow from your investment. The only way to profit off of an investment in physical gold is to sell it for a higher price than what you bought it for. Mining companies, however, do generate cash, and in many cases the mining company returns some of this cash to investors in the form of a dividend. For example, Goldcorp (NYSE: GG ) , one of the largest gold miners in the world, pays a trailing dividend of $0.60 per share. This is a 2.10% yield at the current stock price.
- [By Ben Levisohn]
Gold and gold miners are generally thought to do best when the market is worried about inflation. Yet the recent rally in gold miners like Goldcorp (GG), Eldorado Gold (EGO) and Randgold Resources (GOLD) has come despite an increase in worries about deflation.
- [By Jim Powell]
Goldcorp (GG) is a gold mining pure-play that is well-suited for somewhat more aggressive investors who want a tighter focus than GDX offers. The company is the second largest producer after Barrick Gold (ABX) and is considered by many analysts to be the best in its industry.
Hot Gold Companies To Watch In Right Now: Golden Star Resources Ltd(GSS)
Golden Star Resources Ltd., a gold mining and exploration company, through its subsidiaries, engages in the acquisition, exploration, development, and production of gold properties. It owns and operates the Bogoso/Prestea gold mining and processing operation that covers approximately 40 kilometers of strike along the southwest-trending Ashanti gold district in western Ghana; and the Wassa open-pit gold mine located to the east of Bogoso/Prestea in southwest Ghana. The company also has an 81% interest in the Prestea underground gold mine located in Ghana. In addition, it holds interests in various gold exploration projects in Ghana, Sierra Leone, Burkina Faso, Niger, and Cote d?Ivoire, as well as holds and manages exploration properties in Brazil in South America. The company was founded in 1984 and is based in Littleton, Colorado.
- [By Patricio Kehoe] ating price of the commodity, along with the geopolitical risks involved in mining in African nations such as Ghana, are just two of the obstacles the firm is facing. In addition, as one of the smallest gold mining firms in the industry, with a market cap of just $122 million, Golden Star has had a very difficult time financing its latest expansion projects. With share prices tumbling towards all-time lows, gurus such as Steven Cohen, Chuck Royce and Arnold Schneider have already sold out their positions in the troubled firm.
Why Have Gurus Lost Faith in Golden Star?
Despite aggressive expansion over the past decade, the Toronto-based gold mining firm has not been able to take advantage of its increased production output. Gold prices might have exploded over a ten-year period, yet the recent six-month decline has put a huge strain on Golden Star. The expedited maturation of its mines is particularly troubling, since the accelerated extraction rates, which allowed for short-term profits, are now falling considerably. The impact of the company’s excessive overproduction on profits and growth is clear: decreasing gold reserves mean less production, and thus reduced revenue for the gold miner. When the decline in metal prices are taken into account, the outlook is even more grim.
In addition to overexpansion at the wrong time, Golden Star’s position has weakened due to its comparably less efficient operations. Unlike industry peers, such as IamGold Corp. (IAG) or Gold Fields Ltd. (GFI), the majority of the Toronto-based miner’s assets contain refractory ore, which is far more expensive to extract than non refractory ore. And, in an attempt to switch production to the lower cost gold ore, and thus increase margins, Golden Star has depleted its mines’ non refractory ore. With low reserves and mounting cash costs, the firm inevitably turned to new acquisitions.
Overpriced Acquisitions and Geopolitical Risk
- [By Rich Duprey]
Clash of the titans
When bears are raging on the gold bullion market, it’s not surprising to see gold stocks getting mauled as well. Golden Star Resources (NYSEMKT: GSS ) was the biggest loser in the sector, losing a quarter of its market cap on no company-specific news, though a report last Friday indicated that a large number of hedge funds had recently dumped their positions in the mid-tier miner. Yet it wasn’t all that much better among the majors, either, as Barrick Gold (NYSE: ABX ) fell almost 13% and Kinross Gold (NYSE: KGC ) was down 14%.