Yamana Gold shares suffer after earnings miss
That doesn't mean you should snap up the stock, however. It's tough to call a bottom for mining stocks.
Worst, though, is a huge increase in cash costs of 31% year-to-year, due in good part to falling prices for the copper that Yamana produces as a “byproduct” of its gold mining activity.
These stocks are caught in a vise of lower gold and copper prices and rising production costs. I think Wednesday’s price of $11.39 on Yamana Gold is a reasonable price for adding to positions. However, I certainly would leave myself some room in any portfolio allocation to Yamana, in case gold goes lower. Adding pluses and minus, I guess that makes me neutral on buying the stock here. One thing I’d like to see is the near-term results of Yamana’s efforts to cut production costs by $100 an ounce by mid-2013 and $150 an ounce by the end of the year. If I saw signs of success in that endeavor, I’d go from neutral to buy.
Relatively low costs. The all in cost of $856 per ounce of gold gives Yamana a solid profit margin, even at current gold prices. The by-product cash cost is a low $383 an ounce.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
As geopolitical tensions threaten to spin out of control, investors are wondering how best to position their portfolios for the global turmoil.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.