Newmont Corporation Has Strong Outlook After Goldman's $3,000 Gold Price Prediction
The gold miner has yet to benefit from rising gold prices but some restructuring could happen just in time.
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Despite small caps and biotech falling in trading action on Tuesday, it was a "red letter" day for a couple of my biotech holdings.
uniQure N.V. QURE rose 110% as the company finally reached an agreement with the FDA around key elements that are necessary for an accelerated approval pathway for its drug candidate as a potential treatment of Huntington’s disease. This triggered Raymond James to bump its price target on QURE to $52 from $20 a share previously, as it believes the treatment, if approved, could have $2 billion peak sales in the U.S. alone. It also upgraded the stock from Outperform to Strong Buy.
Cardiff Oncology, Inc. CRDF also rose nearly 55% after the company disclosed quite encouraging mid-stage trial data on an oncology candidate. uniQure and Cardiff have been laggards in my portfolio for a couple of years, but I have been able roll the options around their covered call positions myriad times. It is nice to see patience finally paying off and to know that I will exit these positions (when the options expire in the money) with an overall profit.
On a side note, Aurinia Pharmaceuticals AUPH was up 14% in trading Tuesday, on much higher-than-normal volume. I just highlighted this biopharma name again this Monday. We will see if this is the start of a breakout or just "noise" in the coming days.
I wish my portfolio was experiencing the same good fortune around some of the commodity names I have added recently to it. Unfortunately, energy and other commodity-related stocks remain laggards in the market. However, there has been some positive news this week on two of these companies I have profiled on these pages.
Goldman Sachs was out this week saying it could see gold hitting $3,000 an ounce in 2025 even if the dollar continues to strengthen. Gold miner Newmont Corporation NEM has not benefited from the big rise in gold prices in 2024, as its stock price is hovering where it began the year. However, it does look like the company is finally taking some steps to rationalize and take costs out of its business operations. Newmont announced a restructuring this week and will merge several business units in an effort to streamline its reporting structure and reduce costs.
The company also sold non-core assets in Colorado and Quebec over the past couple of weeks and now has shed nearly $4 billion of non-strategic operations since it purchased Newcrest Mining in 2023. Hopefully, these moves will result in much better performance for the company and its shareholders in the coming year. The stock appears to be trading near technical support, so I have added a bit of exposure to Newmont this week.
Speaking of shedding non-core assets, oil and gas producer Permian Resources (PR) announced this week it was selling some midstream gathering systems for $180 million. The company already had a solid balance sheet that allows Permian Resources to be an aggressive buyer of its own stock which trades at a discount to peers as well as payout a very generous dividend yield. The company is the largest pure play Permian E&P concern with some 450,000 acres in the Delaware Basin.
At the time of publication, Jensen was long AUPH, CRDF, NEM, PR and QURE.
