Key Insights
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Gold mining stocks pulled back together with the price of gold.
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Kinross Gold was under pressure due to its exposure to Russia, but the company managed to reach a deal to sell its Russian assets.
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AngloGold Ashanti stock is valued at less than 10 forward P/E, which is cheap for the current market environment.
Gold has recently suffered a serious pullback as traders focused on rising Treasury yields. At the same time, S&P 500 is trading near yearly lows, so demand for safe-haven assets may increase soon. In this market environment, it’s time to take a look at some gold mining stocks.
Kinross Gold
Kinross Gold is currently trading near yearly lows. The company’s assets in Russia have served as the main bearish catalyst for the stock.
However, Kinross Gold has already arranged a deal with Highland Gold and will sell 100% of its Russian assets for a total consideration of $680 million in cash. The company has also decided to sell its 90% interest in Chirano mine in Ghana for $225 million.
The sales will decrease Kinross’ production in the upcoming years, and the company will present its new guidance when it reports its first-quarter results. Meanwhile, the stock is trading at just 10 forward P/E, which is cheap compared to major peers, and it looks that many negative catalysts have been already priced in by the market.
AngloGold Ashanti
Another major gold mining company that is trading at less than 10 forward P/E is AngloGold Ashanti. The stock is mostly flat year-to-date, and the recent pullback was caused by the material sell-off in gold markets.
Any bet on a gold mining company is also a bet on the price of gold, so AngloGold Ashanti stock will need more support from gold markets to have sustainable upside.
It should be noted that AngloGold Ashanti will release its first-quarter results on May 9, and this release will serve as an additional catalyst for the stock.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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