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Newmont Mining and Other Gold and Silver Stocks Making Big Moves on September 27, 2012
So far today, the Nasdaq has moved up 0.4%, the S&P 500 has increased 0.3% and the Dow is unchanged.
The Gold and Silver sector (SLV) has risen 1% so far today and here are its biggest movers:
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Seabridge Gold, Inc (NYSE:SA) has moved up 3.2% and is currently trading at $19.53 per share. This morning, the company's volume is 78,908 shares. This is 0.1 times the average daily volume. A stock's volume conveys how excited investors are about it. In making a decision about a potential or existing investment, valuation ratios are useful as a basis for seeing whether the stock price is too high, reasonable, or a bargain. The debt ratio is calculated by dividing total liabilities by total assets. SA has a low debt ratio of 4.9%. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
After rising 2.8%, Silver Wheaton Corp (NYSE:SLW) is currently trading at a share price of $38.72. So far today, the company's volume is 2.3 million shares, lighter than yesterday's volume of 7.1 million shares. Volume is used to evaluate how meaningful the price movement of a stock is. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. SLW has a fairly low capitalization ratio of 1.2%. A low capitalization ratio can signify a failure to leverage equity into investment, missing valuable opportunities for growth and expansion. The capitalization ratio is one of the more meaningful debt ratios because it focuses on the relationship of debt liabilities as a component of a company's total capital base, which is the capital raised by shareholders and lenders.
Increasing 2.6%, Coeur d'Alene (NYSE:CDE) is trading at $28.57 per share. The company is currently trading a volume of 695,869 shares. In technical analysis, trading volume is used to determine the strength of a market indicator. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. CDE has a P/E ratio of 35.6, high compared to the industry average of 3.43. This could mean that the market is expecting big things over the next few months or years. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: Understanding The P/E Ratio
Royal Gold (Nasdaq:RGLD) has moved up 2.1% and is currently trading at $96 per share. So far today, the company's volume is 195,723 shares, 0.2 times the current three-month average. Volume indicates the level of interest that investors have in a company at its current price. Valuation ratios like the price to earnings (P/E) ratio, the price to earnings growth (PEG) ratio, the price to sales (P/S) ratio, the price to book (P/B) ratio, and the dividend yield are useful in determining how attractive a potential or existing investment is. To a large degree, the debt-equity (D/E) ratio provides another vantage point on a company's leverage position, in this case, comparing total liabilities to shareholders' equity, as opposed to total assets in the debt ratio. RGLD has a low debt-equity ratio of 16%. A low D/E ratio may be a sign that the company is not taking advantage of leverage to increase its profits. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
Pan American Silver Corp (Nasdaq:PAAS) has increased to a share price of $21.48, a 2% rise. The company's volume for the day so far is one million shares. This is 0.2 times its current daily average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. A company's value as an investment is more easily estimated using valuation ratios such as the price to earnings (P/E) ratio, the price to earnings growth (PEG) ratio, the price to sales (P/S) ratio, the price to book (P/B) ratio, and the dividend yield. The price/earnings to growth (PEG) ratio divides a company's P/E ratio by its growth rate of earnings-per-share. PAAS' PEG ratio is 1.77. While P/E ratios are important indicators of market value, a high P/E in and of itself is not bad because it may indicate a company whose earnings are growing very rapidly, so many investors look at the PEG ratio in order to get an idea of whether or not a particular P/E ratio is justified by underlying earnings growth.
Rising 1.7%, First Majestic (NYSE:AG) is currently trading at $22.76 per share. The company's volume is currently 346,078 shares for the day, on pace to finish the day below yesterday's volume of 1.4 million shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The price/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. The P/B ratio for AG is 6.07, indicating that the stock is trading for more than its book value. It is important to take the company's debt into account when using the P/B ratio as debt can boost a company's liabilities to the point where they wipe out much of the book value of its hard assets, creating artificially high P/B values. P/B has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: Using The Price-To-Book Ratio To Evaluate Companies
After an increase of 1.4%, Newmont Mining (NYSE:NEM) has reached a current price of $56.06. The company's volume for the day so far is 2.2 million shares. Volume is an important indicator in technical analysis as it is used to measure the worth of a market move. If the markets have made a strong price move either up or down the perceived strength of that move depends on the volume for that period. The higher the volume during that price move the more significant the move. Investment valuation ratios can be very useful in determining the value of a stock, but it is very important to keep in mind that while some financial ratios have general rules (or a broad application), in most instances it is a prudent practice to look at a company's historical performance and use peer company/industry comparisons to put any given company's ratio in perspective. The dividend yield is calculated by dividing a company's dividends per share by its stock price. Dividend yield for NEM is 2.5%. Simply comparing the level of dividends that two stocks pay does not give a true reflection of which security is more attractive, so investors calculate the dividend yield in order to standardize dividend payments. SEE: Due Diligence On Dividends
The Bottom Line The nature of the market is such that stocks will have good days and bad days. Daily stock performance should be weighed against historical performance and put in context of the market overall. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
The Gold and Silver sector (SLV) has risen 1% so far today and here are its biggest movers:
| Company | Market Cap | Percentage Change |
| Seabridge Gold, Inc (NYSE:SA) | $822.5 million | +3.2% |
| Silver Wheaton Corp (NYSE:SLW) | $13.32 billion | +2.8% |
| Coeur d\'Alene (NYSE:CDE) | $2.5 billion | +2.6% |
| Royal Gold (Nasdaq:RGLD) | $5.54 billion | +2.1% |
| Pan American Silver Corp (Nasdaq:PAAS) | $3.21 billion | +2% |
| First Majestic (NYSE:AG) | $2.59 billion | +1.7% |
| Newmont Mining (NYSE:NEM) | $27.15 billion | +1.4% |
Seabridge Gold, Inc (NYSE:SA) has moved up 3.2% and is currently trading at $19.53 per share. This morning, the company's volume is 78,908 shares. This is 0.1 times the average daily volume. A stock's volume conveys how excited investors are about it. In making a decision about a potential or existing investment, valuation ratios are useful as a basis for seeing whether the stock price is too high, reasonable, or a bargain. The debt ratio is calculated by dividing total liabilities by total assets. SA has a low debt ratio of 4.9%. This indicates that the company engages in conservative financing with opportunities to borrow in the future at no significant risk. As with all financial ratios, a company's debt ratio should be compared with the industry average or similar companies.
After rising 2.8%, Silver Wheaton Corp (NYSE:SLW) is currently trading at a share price of $38.72. So far today, the company's volume is 2.3 million shares, lighter than yesterday's volume of 7.1 million shares. Volume is used to evaluate how meaningful the price movement of a stock is. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The capitalization ratio is calculated by dividing long-term debt by the sum of long-term debt and shareholders' equity. SLW has a fairly low capitalization ratio of 1.2%. A low capitalization ratio can signify a failure to leverage equity into investment, missing valuable opportunities for growth and expansion. The capitalization ratio is one of the more meaningful debt ratios because it focuses on the relationship of debt liabilities as a component of a company's total capital base, which is the capital raised by shareholders and lenders.
Increasing 2.6%, Coeur d'Alene (NYSE:CDE) is trading at $28.57 per share. The company is currently trading a volume of 695,869 shares. In technical analysis, trading volume is used to determine the strength of a market indicator. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. CDE has a P/E ratio of 35.6, high compared to the industry average of 3.43. This could mean that the market is expecting big things over the next few months or years. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: Understanding The P/E Ratio
Royal Gold (Nasdaq:RGLD) has moved up 2.1% and is currently trading at $96 per share. So far today, the company's volume is 195,723 shares, 0.2 times the current three-month average. Volume indicates the level of interest that investors have in a company at its current price. Valuation ratios like the price to earnings (P/E) ratio, the price to earnings growth (PEG) ratio, the price to sales (P/S) ratio, the price to book (P/B) ratio, and the dividend yield are useful in determining how attractive a potential or existing investment is. To a large degree, the debt-equity (D/E) ratio provides another vantage point on a company's leverage position, in this case, comparing total liabilities to shareholders' equity, as opposed to total assets in the debt ratio. RGLD has a low debt-equity ratio of 16%. A low D/E ratio may be a sign that the company is not taking advantage of leverage to increase its profits. The D/E ratio percentage provides a much more dramatic perspective on a company's leverage position than the debt ratio percentage.
Pan American Silver Corp (Nasdaq:PAAS) has increased to a share price of $21.48, a 2% rise. The company's volume for the day so far is one million shares. This is 0.2 times its current daily average. Volume is also used as a secondary indicator to help confirm what the price movement is suggesting. A company's value as an investment is more easily estimated using valuation ratios such as the price to earnings (P/E) ratio, the price to earnings growth (PEG) ratio, the price to sales (P/S) ratio, the price to book (P/B) ratio, and the dividend yield. The price/earnings to growth (PEG) ratio divides a company's P/E ratio by its growth rate of earnings-per-share. PAAS' PEG ratio is 1.77. While P/E ratios are important indicators of market value, a high P/E in and of itself is not bad because it may indicate a company whose earnings are growing very rapidly, so many investors look at the PEG ratio in order to get an idea of whether or not a particular P/E ratio is justified by underlying earnings growth.
Rising 1.7%, First Majestic (NYSE:AG) is currently trading at $22.76 per share. The company's volume is currently 346,078 shares for the day, on pace to finish the day below yesterday's volume of 1.4 million shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. Looking at a company's valuation ratios is a good way of getting a basic idea as to its value as an investment. The price/book value ratio provides a way of evaluating whether a stock is relatively cheap or expensive. The P/B ratio for AG is 6.07, indicating that the stock is trading for more than its book value. It is important to take the company's debt into account when using the P/B ratio as debt can boost a company's liabilities to the point where they wipe out much of the book value of its hard assets, creating artificially high P/B values. P/B has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: Using The Price-To-Book Ratio To Evaluate Companies
After an increase of 1.4%, Newmont Mining (NYSE:NEM) has reached a current price of $56.06. The company's volume for the day so far is 2.2 million shares. Volume is an important indicator in technical analysis as it is used to measure the worth of a market move. If the markets have made a strong price move either up or down the perceived strength of that move depends on the volume for that period. The higher the volume during that price move the more significant the move. Investment valuation ratios can be very useful in determining the value of a stock, but it is very important to keep in mind that while some financial ratios have general rules (or a broad application), in most instances it is a prudent practice to look at a company's historical performance and use peer company/industry comparisons to put any given company's ratio in perspective. The dividend yield is calculated by dividing a company's dividends per share by its stock price. Dividend yield for NEM is 2.5%. Simply comparing the level of dividends that two stocks pay does not give a true reflection of which security is more attractive, so investors calculate the dividend yield in order to standardize dividend payments. SEE: Due Diligence On Dividends
The Bottom Line The nature of the market is such that stocks will have good days and bad days. Daily stock performance should be weighed against historical performance and put in context of the market overall. Keep in mind that all these ratios should be compared against historical numbers and industry information in order to get a more complete picture.
by
Investopedia Staff
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