RE:RE:RE:Minus 5% today only wowBut where's the bottom you ask? Ah, the million dollar question, or actually the Billion dollar question if you go by the value of the 30.6 million NEM shares traded today!
Well it's never easy picking the exact bottom and trying to catch that falling knife can be painful. But I can tell you with a reasonable degree of certainty that this stock is now a lot closer to the bottom than it is to the top. And the technicals (RSI, MACD, and the huge trade volume) today tells me the institutions are now piling back into the stock. Is it merely for the upcoming quarterly divident of that mere .25 cents, perhaps but not too likely. By my calculations NEM is now trading at about 16 times forward earnings and that's a pretty reasonable valuation for a gold behemoth like Newmont!
With 650K NGT shares traded on the TSX today (almost 4 times the daily volume) and 30.6 million NEM shares (3 times the avg daily volume) you don't need to be a rocket scientist to figure out that those volumes aren't retail investors. The 30.6 million shares of NEM traded today equals about $948 million (so let's just round that up to a cool $ Billion US dollars!) On the TSX side the 649K shares traded today adds another $30 million CAD so what do you think is happening?
The retail investors have all got their knickers in a knot because many bought this thing at much higher prices. And as is normal with retail, most have either had enough and are selling to avoid what they see as further losses coming or holding and are too scared to buy anymore. But apparently the huge "Instituional" buying today see value here and so do I. Once retail stops selling their shares and the hedge funds are done "fleecing the sheep" they'll run this thing back up faster than you can blink. They worked over Wheaton yesterday and a bit more today but backed off Wheaton because Newmont was a much bigger fish!
The people at Newmont are no dummies, they're going to pick the best hanging fruit for themselves and sell off what they don't want at the Farmer's Market and with the quality of assets and their favourable locations, still get a pretty decent dollar for the slightly bruised but still edible remains. In fact I wouldn't be surprised if they don't already have buyers lined up and will start announcing the sales sooner than most are anticipating. In 6 months or less, Newmont won't be trading at these prices and the "Institutional" buyers today will be more than happy to sell retail some shares back as the sheep come back to graze. It's quite the game really and retail is always late to the party!
My opinion only, DYODD.
HB77