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Sergey Savastiouk's Avatar
published in Blogs
Feb 25, 2019

Barrick Gold (GOLD, $13.35 ) makes $18 billion bid for Newmont Mining (NEM, $36.48), to create world's biggest gold company

On Monday, Barrick Gold Corp. announced its formal bid for acquiring Newmont Mining Corp. to create the world’s largest gold mining company.

Barrick Gold’s proposed merger would be an all-share deal of close to $18 billion, involving an exchange ratio of 2.5694 Barrick shares for each Newmont share. According to Barrick CEO Mark Bristow, the merger would lead to the unlocking of $7 billion net present value in real synergies. Barrick views the two firms’ combined assets in Nevada to be a major potential driver of value for the proposed combined entity.

If the merger goes through, Barrick would own 55.9% stake in the combined company, while Newmont investors would hold 44.1%.  The combined company might offer Newmont's annual dividend of 56 cents per share to shareholders. According to Barrick, the merger if approved would lead to an estimated 14% increase in Newmont's current net asset value per share.

Bristow is apparently hoping that the deal would not only result in creating the world’s “best gold company”, but also boost the overall gold industry’s prospects.  "Considered globally, the merger represents a radical and long-overdue restructuring of the gold industry, and a transformative shift from short-term survival tactics to the long-term creation of sustainable value," Bristow said.  Since 2013, gold futures have hardly been able to push past the price range of $1,000 to $1,400 per ounce.

This is not the only instance in recent times of Barrick apparently trying to concentrate its position in the market for gold. Last month, Barrick bought rival Randgold Resources for $6.1 billion.

 

Related Ticker: GOLD

Momentum Indicator for GOLD turns positive, indicating new upward trend

GOLD saw its Momentum Indicator move above the 0 level on October 28, 2024. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 86 similar instances where the indicator turned positive. In of the 86 cases, the stock moved higher in the following days. The odds of a move higher are at .

Price Prediction Chart

Technical Analysis (Indicators)

Bullish Trend Analysis

The Stochastic Oscillator is in the oversold zone. Keep an eye out for a move up in the foreseeable future.

Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where GOLD advanced for three days, in of 307 cases, the price rose further within the following month. The odds of a continued upward trend are .

The Aroon Indicator entered an Uptrend today. In of 224 cases where GOLD Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .

Bearish Trend Analysis

The Moving Average Convergence Divergence Histogram (MACD) for GOLD turned negative on October 25, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 48 similar instances when the indicator turned negative. In of the 48 cases the stock turned lower in the days that followed. This puts the odds of success at .

GOLD moved below its 50-day moving average on October 25, 2024 date and that indicates a change from an upward trend to a downward trend.

Following a 3-day decline, the stock is projected to fall further. Considering past instances where GOLD declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

GOLD broke above its upper Bollinger Band on October 18, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.268) is normal, around the industry mean (6.658). P/E Ratio (23.417) is within average values for comparable stocks, (81.180). Projected Growth (PEG Ratio) (1.923) is also within normal values, averaging (8.405). Dividend Yield (0.024) settles around the average of (0.040) among similar stocks. P/S Ratio (2.596) is also within normal values, averaging (147.082).

The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. GOLD’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. GOLD’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 87, placing this stock better than average.

The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating slightly better than average sales and a considerably profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

Notable companies

The most notable companies in this group are Newmont Corp (null:NEM), Barrick Gold Corp (null:GOLD), Wheaton Precious Metals Corp (null:WPM), Gold Fields Ltd (null:GFI), Kinross Gold Corp (null:KGC), Pan American Silver Corp (null:PAAS), Hecla Mining Company (null:HL), FIRST MAJESTIC SILVER Corp (null:AG), SSR Mining (null:SSRM).

Industry description

The Precious Metals industry is engaged in exploring/mining metals that are considered to be rare and/or have a high economic value. Popular precious metals include gold, platinum and silver - all three of which are largely used in jewelry, art and coinage alongwith having some industrial uses as well. Precious metals used in industrial processes include iridium, (used in specialty alloys), and palladium ( used in electronics and chemical applications). Historically, precious metals have traded at much higher prices than common industrial metals. Newmont Goldcorp Corp, Barrick Gold Corp and Freeport-McMoRan are few of the major precious metals producing companies in the U.S.

Market Cap

The average market capitalization across the Precious Metals Industry is 1.02B. The market cap for tickers in the group ranges from 575 to 47.49B. ZIJMY holds the highest valuation in this group at 47.49B. The lowest valued company is DRIFF at 575.

High and low price notable news

The average weekly price growth across all stocks in the Precious Metals Industry was 2%. For the same Industry, the average monthly price growth was 11%, and the average quarterly price growth was 4%. SLRRF experienced the highest price growth at 619%, while CRTIF experienced the biggest fall at -83%.

Volume

The average weekly volume growth across all stocks in the Precious Metals Industry was -38%. For the same stocks of the Industry, the average monthly volume growth was -12% and the average quarterly volume growth was -12%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 52
P/E Growth Rating: 79
Price Growth Rating: 52
SMR Rating: 89
Profit Risk Rating: 87
Seasonality Score: -1 (-100 ... +100)
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A.I.Advisor
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General Information

a miner and explorer of gold

Industry PreciousMetals

Profile
Fundamentals
Details
Industry
Precious Metals
Address
161 Bay Street, Brookfield Place
Phone
+1 416 861-9911
Employees
24600
Web
https://www.barrick.com
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