September ended with gold back under $1,300 an ounce, and short sellers fled from the leading gold stocks between the September 13 and September 30 settlement dates.

Eldorado Gold (NYSE: IAG) saw their short interest plunge more than 60 percent.

The short interest in Agnico Eagle Mines (NYSE: GG), Gold Fields (NYSE: GFI), Kinross Gold (NYSE: KGC), Randgold Resources (NASDAQ: GOLD), Royal Gold (NASDAQ: RGLD) and Yamana Gold (NYSE: AUY) also declined by double-digit percentages in the period.

The number of shares sold short in Newmont Mining (NYSE: NEM) declined modestly to the end of September.

In addition, the number of shares sold short in silver companies Coeur Mining (NYSE: CDE), First Majestic Silver (NYSE: AG), Pan American Silver (NASDAQ: PAAS) and Silver Wheaton (NYSE: SLW) also shrank by double-digit percentages during the period.

See also: Applied Materials, Marvell Technology Face Rising Short Interest

Below is a quick look at how Eldorado Gold, Harmony Gold Mining and IAMGOLD have fared and what analysts expect from them.

Eldorado Gold

This Vancouver-based gold miner and producer saw its short interest drop about 68 percent from a year-to-date peak in the previous period to around 3.66 million shares by the end of the month. That was the lowest number of shares sold short since April, and it was still less than one percent of the float.

At least one analyst sees Eldorado Gold as positioned to prosper despite lower gold prices. The company's market capitalization is around $4 billion and the dividend yield is near 1.5 percent. It has a long-term earnings per share (EPS) growth forecast of more than nine percent.

The consensus recommendation of the analysts who follow the stock and were surveyed by Thomson/First Call is to buy shares. The mean price target, or where analysts expect the share price to go, suggests about 42 percent potential upside. Yet, their target is well short of the 52-week high.

The share price has retreated more than 10 percent in the past month and is again approaching the 52-week low. Though the stock has outperformed the likes of Agnico Eagle Mines and Kinross Gold over the past six months, it has underperformed the broader markets in that time.

Harmony Gold Mining

Short interest in this South African gold miner declined about 62 percent during the latter two weeks of September to more than 2.87 million shares. That was the lowest number of shares sold short since back in May. During the period, shares traded at the highest average daily volume in the past year.

Forbes recently identified Harmony Gold as popular with guru investors. The company has a market cap of more than $1 billion and a dividend yield of about 2.9 percent. The long-term EPS growth forecast is about five percent, but the return on equity and operating margin are in negative territory.

Just one of the three surveyed analysts recommends buying shares. Yet they feel the stock has room to run when it bottoms, as their mean price target is about 42 percent higher than the current share price. However, that the consensus target is less than the 52-week high reached back in January.

Shares ended last week at a new multiyear low after falling more than 65 percent since the beginning of the year. Over the past six months, the stock has underperformed not only competitors such as Gold Fields, but the broader markets as well.

See also: Short Sellers Move On Amgen, Vertex

IAMGOLD

The short interest in this Toronto-based miner of gold, silver and copper fell about 62 percent in the period to more than 4.69 million shares. That was more than one percent of the total float. And it was the lowest number of shares sold short since April, on the highest average daily volume in a least a year.

IAMGOLD suspended mining activities in Mali in mid-September. The company has a market cap of less than $2 billion and a dividend yield near 5.5 percent. The price-to-earnings (P/E) ratio is less than the industry average, but the return on equity is less than four percent.

The consensus recommendation of the surveyed analysts is to hold shares of IAMGOLD. Their mean price target is more than 33 percent higher than the current share price, though that target is much less than the 52-week high reached almost a year ago.

The share price has retreated about 15 percent in the past month, and it is almost 69 percent lower than at the beginning of the year. The stock has underperformed competitors such as Randgold Resources, as well as the broader markets, over the past six months.

At the time of this writing, the author had no position in the mentioned equities.

Related Articles
  1. Stock Analysis

    How Much Coca-Cola Spends on Advertising

    Learn about Coca-Cola's ad spending and why the company has decided to spend the amount of money it does. Understand comparable companies and industries.
  2. Investing

    Welcome Back, Volatility

    Volatility is likely to resurface as the Federal Reserve gets closer to adjusting its monetary policy stance, even if that adjustment is a measured affair.
  3. Economics

    What Is The Labor Market Conundrum?

    We are facing a conundrum with investment implications: Why are wages still stagnant, when jobs are being created at the fastest pace since the late 90's?
  4. Investing

    Why Are Consumers In Hesitation?

    Diverging monetary policy globally and a stronger dollar continued to be key drivers of the recent underperformance and last week’s tumble in U.S. stocks.
  5. Economics

    Bulk Shipping Companies Struggle As Markets Soften

    The "soft" dry bulk shipping market that confronts shipping companies is a result of lower demand from China, and an excessive amount of bulk ships.
  6. Stock Analysis

    Sierra Wireless Benefits From These Megatrends

    We take a closer look at how Sierra Wireless' transition from 2G to 3G and 4G technologies, has impacted its business today, and the future expectations.
  7. Stock Analysis

    3 Growth Opportunities For ARM Holdings

    ARM Holdings highlighted several growth opportunities in its most recent roadshow presentation. Here are three of the large opportunities it talked about.
  8. Stock Analysis

    Is Cheniere Energy Still On Track For 2016?

    The energy boom in the U.S. has opened up a huge range of opportunities in the oil and gas industry.
  9. Stock Analysis

    What’s The Key To Costco’s Extraordinary Success?

    Costco has been one of America's most successful companies: It's growing, efficient, profitable and its long-term shareholders have benefited a windfall.
  10. Stock Analysis

    Can American Capital Agency Maintain Its Dividend?

    Dividend investors know that real estate investment trusts with REITs that invest in mortgage-backed securities produce double-digit dividend yields.
RELATED TERMS
  1. Fractal Markets Hypothesis (FMH)

    An alternative investment theory to Efficient Market Hypothesis ...
  2. Core Durable Goods Orders

    New orders for U.S. core durable goods, which are the total durable ...
  3. Investopedia

    One of the best-known sources of financial information on the ...
  4. Market Depth

    The market's ability to sustain relatively large market orders ...
  5. Closing Tick

    The difference between the number of stocks that closed higher ...
  6. Institutional Brokers' Estimate ...

    A system that gathers and compiles the different estimates made ...
RELATED FAQS
  1. What is the long-term outlook of the metals and mining sector?

    An industry agency council was established by the World Economic Forum in 2014 to serve as an advisory board on the future ... Read Full Answer >>
  2. What is the railroads sector?

    The railroads sector is comprised of publicly traded stocks for companies that operate railroad tracks and/or trains. Railroad ... Read Full Answer >>
  3. Who are Amgen Inc.'s (AMGN) main competitors?

    Biotech giant Amgen Inc (AMGN) bills itself as one of the first biotechnology firms. It was founded in 1980 and has grown ... Read Full Answer >>
  4. What's the most expensive stock of all time?

    Back in late August 2012, Apple’s (AAPL) stock price reached nearly $700 per share. The stock has since split but has yet ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!