CA - McEwen Mining: Suitable For Gold Rally At Lower Share Price

2024-03-11 09:23:12 ET

Summary

• McEwen Mining is given a Buy rating, but investors should wait for a significant pullback in the stock price before buying.
• McEwen Mining tends to underperform compared to other companies in the industry and sector in the long term.
• However, McEwen Mining shares can still be used profitably to participate in the very bullish sentiment in the gold price in the near future that is emerging this year.

A “Buy” Rating for McEwen Mining

This analysis issues a Buy rating for shares of McEwen Mining ( MUX ) ( MUX:CA ) not to implement soon but after the stock price has pulled back significantly from current levels in order to have a greater chance of a robust gain. However, this recommendation is given to investors not in the spirit of buying shares for the long term, as the shares tends to underperform heavily if they are held in the portfolio for years, but to benefit from very bullish sentiment that is on its way to emerge in gold prices in the near future.

McEwen Mining's Long-Term Performance

From the chart below it does not seem that McEwen Mining is a stock to keep in the portfolio for the long term, as it tends to significantly underperform many other companies operating in the same industry and sector. If the retail investor had bought MUX shares five years ago and held the position constant over the period, his investment would have achieved a whopping 54.66% return, but unfortunately deep in the red, while the Materials Select Sector SPDR® Fund ETF (XLB) and the VanEck Gold Miners ETF ( GDX ) saw their shares rise by 64.57% and 32.23%, respectively. XLB is the benchmark for the basic materials sector, while GDX is the benchmark index for precious metal mining stocks....

For further details see: