CUR - Newmont: Asymmetric Risk/Reward Makes It A Strong Buy Here
2024-02-10 08:30:00 ET
Summary
- Newmont Corporation stock performance has diverged from the upward trajectory of gold prices, leading to an unanticipated bifurcation.
- Concerns about execution challenges and production risks continue to haunt gold mining investors.
- Despite the concerns, Newmont's profitability is expected to improve in 2024, with enhanced scale economies. Its robust balance sheet also adds to the shine.
- With an increasingly attractive valuation, it should attract dip buyers waiting for the selling pressure from the recent capitulation to peter out.
- Upgrade to Strong Buy as NEM looks well-positioned for a mean-reversion setup at the current levels.
Investors in gold mining leader Newmont Corporation (NEM) observed a significant bottom in NEM, as I updated in my previous article in late November. That thesis played out accordingly as NEM surged toward its December 2023 highs. However, while gold prices ( XAUUSD:CUR ) ( GLD ) have consolidated in line with their December levels, NEM took another battering as buyers gave up, leading to a capitulation, taking out its November 2023 lows....
Newmont: Asymmetric Risk/Reward Makes It A Strong Buy Here