Tag Archives: stocks

Reasons To Bet On Gold Mining ETFs Now

Gold Mining ETFs have been firing on all cylinders lately thanks to the dual favor by a dovish Fed and an aggressive China. The Fed seems to be in no hurry to hike interest rates this year and has hinted at just two hikes this year dampening the greenback and propelling the broader commodities including gold. In fact, a volatile market outlook, which is making places for safe-haven assets like gold and a sagging dollar, led the gold bullion to rally hard this year. Gold bullion ETF SPDR Gold Shares (NYSEARCA: GLD ) has surged 18.3% so far this year (as of April 11, 2016), enjoying the largest first-quarter gain in three decades. Along with the underlying metal gold, gold mining ETFs also put up great gains as these often trade as leveraged plays on gold. Plus, Chinese gold miners are hunting for lucrative foreign acquisitions thanks to lower gold prices so that they can acquire assets at a bargain, as per Wall Street Journal. Wall Street Journal also reported that “if cash-rich Chinese gold miners embark on an asset-buying spree, China could reduce its dependency on other international producers for supplies and increase its heft in global gold markets. Since many global gold mining companies are facing hard times due to years of low gold prices, these are appearing as lucrative acquisition targets of Chinese buyers. China is the world’s top gold consumer, accounting for about one-third of the global demand. So, its interest in gold acquisition is self-explanatory. In 2015, Barrick Gold Corporation (NYSE: ABX ) offloaded a 50% interest in Barrick (Niugini) Limited (BNL) to Chinese mining company Zijin Mining Group Co. Ltd. ( OTCPK:ZIJMF ) for a total cash consideration of $298 million. Apart from Zijin, another company Zhaojin Mining Industry Co. Ltd. ( OTCPK:ZHAOF ) is mulling over the idea of an overseas gold mining acquisition, as per Wall Street Journal. Several gold mining ETFs hit a 52-week high on April 11. Among them, we highlight five ETFs below that exhibited strong pricing gains. The Weighted Alpha of most of these ETFs hovered around positive 50 , indicating the possibility of further gains. Global X Gold Explorers ETF (NYSEARCA: GLDX ) The fund seeks to match the performance and yield of the Solactive Global Gold Explorers Index. The $39.2-million ETF charges 65 bps in annual fees and has a dividend yield of 7.58% (as of April 11, 2016). First Mining Finance ( OTCQB:FFMGF ), Seabridge Gold (NYSE: SA ), and Oceanagold Corp. ( OTCPK:OCANF ) command the top three positions in the basket. Market Vectors Junior Gold Miners ETF (NYSEARCA: GDXJ ) This one tracks the Market Vectors Junior Gold Miners Index, which provides exposure to small- and medium-capitalization companies that generate at least 50% of their revenues from gold and/or silver mining. The $1.97-billion product charges 55 basis points in annual fees with a paltry annual dividend yield of 0.46%. B2Gold Corp. (NYSEMKT: BTG ), Alamos Gold Inc. (NYSE: AGI ) and Centamin PLC ( OTCPK:CELTF ) occupy the top three positions in the 49-stock fund. ALPS Sprott Junior Gold Miners ETF (NYSEARCA: SGDJ ) SGDJ seeks to deliver exposure to the Sprott Zacks Junior Gold Miners Index. Each stock’s weighting in the index is based on two factors, namely revenue growth and price momentum. The $34.3-million ETF charges investors 57 basis points on an annual basis. Among individual holdings, Sibanye Gold Ltd. (NYSE: SBGL ), Detour Gold ( OTCPK:DRGDF ) and Tahoe Resources (NYSE: TAHO ) occupy top three spots in the fund. iShares MSCI Global Gold Miners (NYSEARCA: RING ) The fund seeks the MSCI ACWI Select Gold Miners Investable Market Index. The $103-million ETF charges 39 basis points a year. The fund currently has 29 companies in its basket, with the top stocks being Barrick Gold Corp. ( ABX ), Newmont Mining Corp. (NYSE: NEM ) and Goldcorp Inc. (NYSE: GG ). Sprott Gold Miners ETF (NYSEARCA: SGDM ) SGDM tracks the Sprott Zacks Gold Miners Index, which is a rules-based index that assigns weighting to a stock on the basis of fundamental factors like revenue growth and balance sheet strength. This $173-million ETF charges 57 bps in fees. The fund currently holds 25 stocks. Among individual holdings, Franco-Nevada Corporation (NYSE: FNV ), Goldcorp Inc. ( GG ) and Agnico Eagle (NYSE: AEM ) comprise 40% of the portfolio. Original Post

Will Banking Stocks Turn The Corner? Keep Eye On Goldman, JPMorgan, Yirendai

Is the financial sector ready to help hoist the stock market higher, at last? One may think so, given investors’ generally warm reaction to the quarterly reports issued so far this week. The SPDR Financial ( XLF ) sector ETF is having a strong start to the second quarter, finishing Thursday trade up 3.7% since April 1. Yet many of the individual household names in the sector still have a lot of repair work left in their stocks. Over the past five trading sessions, energy, metals and agricultural stocks have paced the market’s gains; many of these commodity-driven groups among IBD’s 197 industries tracked are up 4% to 5% or even more. But if you sift through the winning groups, out come three financial groups worth further study: money center banks, super regional banks and consumer loans. Among those three groups, the consumer loans group is the best performer, up more than 1% year-to-date. In that group, Southfield, Mich.-based Credit Acceptance ( CACC ) boasts at least 19 quarters in a row of double-digit EPS growth and five straight quarters of accelerating revenue growth. A $4 billion market cap makes it the fifth largest in the group. Yet the stock’s action since October has a bungee cord-like feel, and Credit Acceptance needs to rise a lot more before a potential new base is completed. For the stock picker, the money center banks may deserve more focused attention, due to their heft in the stock market today and huge influence over the economy. The group still shows a lowly group RS ranking in terms of six-month performance; in Thursday’s IBD, the banking subgroup ranked 167th out of 197, yet it’s now almost positive for the year. Leading the way are major Canadian lenders including Bank of Montreal ( BMO ) and Toronto Dominion ( TD ), recently featured in the IBD Global Leaders column. JPMorgan Chase ( JPM ), fresh from posting better than expected Q1 results last week, retook its 200-day moving average this week. This is a key step in developing a proper buy point. It needs to hold above the long-term moving average line and approach the 68-69 price level, where the stock has met frequent upside resistance. What could be the catalysts for a further move up? One big factor would be a more steeply sloping yield curve. The bigger the slope, the more the JPMorgan and other lenders can benefit from the cost of attracting deposits and the rates it charges on residential mortgage and commercial loans. On April 13, JPMorgan posted a 12% rise in net income at its consumer and community banking division; overall lending bulged 11% to $847.3 billion. As noted in Tuesday’s IBD, the largest U.S. bank surprised analysts with solid gains in consumer loans. The stock’s RS Rating has risen dramatically, from 39 to 61 in less than three weeks. The rating can be seen in IBD Stock Checkup . Keep an eye on Goldman Sachs ( GS ), also a giant in the money center group, and Bank of New York-Mellon ( BK ), which shot past its 200-day line after reporting a 10% lift in earnings to 79 cents a share, its fifth straight quarter of double-digit profit growth. IBD’s super regional banks group is still in the red since Jan. 1; Great Western Bancorp ( GWB ) of Sioux Falls, S.D., is the sole stock in the 12-member group with EPS and RS ratings of 80 or higher. Great Western finished Thursday 4.7% past a 28.10 cup-with-handle entry, barely in buy range. Returning to the consumer loans group, three stocks in it now have a Composite Rating of 80 or higher, including Yirendai ( YRD ). The Chinese new issue is an online consumer financing marketplace trading roughly 6% above its IPO debut at 10 a share. The small-cap name (over $600 million market cap, $209 million in 2015 revenue) has grown the top line 1,327%, 1,561%, 630% and 279% vs. year-ago levels in the past four quarters.