Tag Archives: stocks

Gold Is Rocking In 2016 So Far; How Far Will Miners Rebound?

With gold prices exploding higher since January, will major gold mining stocks take on a similar shine for the rest of the year? After dwelling in the market’s cellar for years, the action among some of the largest companies in the world seems to be saying yes for now. Those who bought the SPDR Gold Trust ( GLD ) ETF, a widely used benchmark to trade the direction of gold futures prices, on Dec. 31 are now sitting on a 9% gain. Not bad, considering that the S&P 500 is down 6.3% since Jan. 1, and the Nasdaq composite is off 10%. On Thursday, spot gold prices finished at $1,156.03 per troy ounce, up nearly 9% since Jan. 1. Some gold mining stocks have even outstripped SPDR Gold Trust. Newmont Mining ( NEM ) is one of nine stocks in IBD’s Mining-Gold/Silver/Gems industry group that boasts a 90 RS Rating or higher and at least a $1 billion market cap. The Greenwood Village, Colo., firm has soared as much as 34% since its 17.99 close. Randgold ( GOLD ), which primarily mines in Mali and Cote d’Ivoire, is up 24% year to date. Through Wednesday, both stocks notch a superior 93 RS Rating out of a maximum 99. Even the beginning investor knows that higher gold prices boost the profits of mining plays. In reality, it’s not that simple. For starters, predicting the path of gold prices is a treacherous one. Gold bulls have been exclaiming for years that amid a growing U.S. debt mountain, ultra-low interest rates and economic uncertainties around the world, gold serves as a safe haven asset. Yet gold has been in a bear market since September 2011. As the monthly chart of GLD shows, the rally since January has not broken gold’s long-term downtrend. Keep in mind that even as gold prices and mining revenues go up, so too can costs. Floods, war and labor strikes can render mines useless for months, if not years. Also, a mining company’s profits can swing sharply based on how much they use pricing hedges for future deliveries. The mining industry’s profit margins have been poor in recent years. Looking at the nine stocks with an RS of 90 or higher, just four had a pretax margin of 10% or higher in 2014. Randgold is tops with 30.2%, followed by Agnico Eagle Mines ( AEM ) (13.7%) Barrick Gold ( ABX ) (11%) and Sibanye Gold ( SBGL ) (10.3%). Newmont scored a pretax margin of 8.2%, down sharply from its 2010 peak of 41.2%. Full-year sales dipped 5%, 15% and 13% in the past three years through 2014, respectively. In 2015, the Street sees sales up 6% to $7.75 billion. Image provided by Shutterstock .

Imperva Topples On Mixed Guidance But Clobbers Q4 Expectations

Cybersecurity firm Imperva ( IMPV ) topped analysts’ Q4 views, but its strangled current-quarter and 2016 guidance sent its shares to nose-diving to a 10-month low on Wall Street Thursday. Imperva stock was down 14% in midday trading on the stock market today , near 42.50, earlier falling as low as 41.81, after the company’s late Wednesday earnings report. At least four analysts cut their price targets on Imperva stock. For Q4, Imperva reported 20 cents earnings per share ex items on $72.7 million in sales, topping analysts projections for 15 cents and $68.1 million, and topping the company’s earlier view for 10-16 cents and $66 million to $68 million. Sales rose 41% year over year, and EPS minus items swung from a four-cent loss in the year-earlier quarter. Imperva wrapped up the year with $234.3 million in sales, up 43%, and 11 cents EPS ex items, swinging from a 74-cent loss in 2014. Both measures beat Wall Street expectations and the company’s forecast three months ago. Imperva’s Q1 Losses Expected To Deepen Current-quarter and 2016 guidance was a mixed bag. For Q1, Imperva sees $58 million to $60 million in sales and a 26-32 loss per share ex items. The sales view roughly met the consensus for $59.8 million, but Wall Street was expecting losses of just 11 cents a share ex items. On a year-over-year basis, Q1 sales would be up 32% at the midpoint of guidance, but losses would stagnate or deepen from 26 cents in the year-earlier quarter. Imperva guided 2016 sales at $302 million to $307 million, which would be up 30% at the midpoint. In September, Imperva saw 25% growth in 2016. But the EPS ex items view for 20 cents missed the consensus model for 30 cents, Summit Research analyst Srini Nandury wrote in a research report. Nandury and Piper Jaffray analyst Andrew Nowinski separately blamed the guidance flop on Imperva’s plan to invest more heavily in sales and marketing as well as research and development to gain market share. Both expect that Imperva’s guidance was conservative. Major breaches drove massive growth in earlier quarters and years, Nowinski wrote in a research report. But that “panic buying” has slowed, he says. “It is becoming clear that in the absence of ‘panic buying,’ the security space can still deliver strong top-line growth, but that growth will come at a higher-than-expected cost,” he wrote. Nowinski maintained his overweight rating on Imperva stock but slashed his price target to 54 from 84. Nandury dropped his price target to 70 from 80 but reiterated a buy rating on Imperva stock. Subscription Sales Drive Top Line Subscription revenue of $14.9 million, up 105%, drove Imperva’s top line, Nowinski wrote. The number of $100,000-plus deals grew 15.4% vs. the year-earlier quarter, “and the company did more seven-figure deals than in the entire history of the company.” William Blair analyst Jonathan Ho suggested long-term investors take advantage of Imperva’s stock weakness. Imperva stock is down 33% in 2016. “The fundamentals appear strong,” Ho wrote in a report. “However, we concede there will likely be some continued short-term volatility for security stocks in general due to challenging market conditions.” IBD’s 26-company Computer Software-Security industry group was down 2% midday Thursday and is down 20% for the year, earlier in the day touching a 16-month low.  Palo Alto Networks ( PANW ) and CyberArk Software ( CYBR ) lead the group with Composite Ratings of 81 and 80, respectively, out of a best-possible 99. Imperva stock has a CR of 47. Image provided by Shutterstock .

Apple Steals ‘Biggest Stock’ Crown As Alphabet Loses Search Chief

Apple ‘s ( AAPL ) gain and Alphabet ‘s ( GOOGL ) fall Wednesday — as Google’s head of search exits — made Apple the biggest stock of all, again — and Apple widened its lead Thursday. At the closing bell Wednesday, Apple stock was up almost 2% to 96.35, giving it a market cap over $534 billion, and Alphabet stock was down 4% at 749.38, with a market cap a little over $515 billion. The trend continued Thursday. In early trading in the stock market today , Apple was up a fraction (market cap near $538 billion) and Alphabet was down 1.5% (market cap near $506 billion). Alphabet initially wrested the top market value title from Apple mid-Monday ahead of its fourth-quarter earnings report, the first that detailed business outside Alphabet’s main Google unit. The two stocks have been jostling for supremacy since. Google Head Of Search Leaving Google’s senior vice president for search, Amit Singhal, wrote in a Google Plus blog post Wednesday that he is leaving Feb. 26, after starting with the company when it was “a small startup” in 2000. “As I entered the fifteenth year of working at Google, I’ve been asking myself the question, ‘what would you want to do for the next fifteen?’ The answer has overwhelmingly been: give back to others. It has always been a priority for me to give back to people who are less fortunate, and make time for my family amidst competing work constraints — but on both fronts, I simply want to give and do more,” Singhal wrote. “Now is a good time to make this important life change. Things are in amazing shape. Search is stronger than ever, and will only get better in the hands of an outstanding set of senior leaders who are already running the show day-to-day.” Google engineering VP John Giannandrea will take Singhal’s place , Re/Code noted, adding that Giannandrea leads Google’s sprawling research and artificial intelligence efforts, and that Google is now merging the research efforts with search, indicating the priority of machine learning at Alphabet. Oh what a journey! Fifteen amazing years at @google . Time for me to take the next turn. https://t.co/TjZhFG1bm6 — Amit Singhal (@theamitsinghal) February 3, 2016 Apple, Alphabet On Their ‘A’ Game? Apple, which gets an IBD Composite Rating of 68 out of a possible 99, was in the lead at the end of Monday’s regular trading as the largest stock of all. Then Alphabet climbed to a $555 billion market cap in extended trading after the close Monday, as investors cheered its Q4 report, vs. Apple at a $533 billion market value. Companies that have held the largest-stock spot in the past include General Electric ( GE ), General Motors ( GM ) and IBM ( IBM ). Alphabet, which gets a best-possible IBD Composite Rating of 99, is down about 3% so far this year, owing to Wednesday’s reversal. YouTube video, mobile search and programmatic ads helped drive Alphabet revenue up 18% from a year earlier to $21.32 billion in its Q4 report, where analysts expected $20.76 billion. Earnings ex items lifted 26% to $8.67 a share, rocketing past the average estimate of analysts polled by Thomson Reuters for $8.09. Image provided by Shutterstock .