After hitting a one-year low of $38.01 in August, the stock hit a one-year high of $57.55 in January. NEM opened this morning at $48.35. So far today the stock has hit a low of $47.95 and a high of $49.31. As of 12:30, NEM is trading at $49.28, up $0.96 (2.0%). The chart for NEM looks bullish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.
For a bullish hedged play on this stock, I would consider a July bull-put credit spread below the $42.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. This particular trade will make an 8.7% return in just six weeks as long as NEM is above $42.50 at July expiration. Newmont would have to fall by more than 13% before we would start to lose money.
NEM hasn't been below that level since August and has shown support around $46 recently. This trade could be risky if the price of gold futures drops in the next few months, but even if that happens, this position could be protected by the support the stock might find at its 200 day moving average, which is currently around $47. Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in NEM.
Newmont Mining (NYSE: NEM), the world's largest non-hedged gold producer, is recently up $1.53 to $51.63. Gold is recently up 2.31% to $988.60, according to Bloomberg.
NEM April option implied volatility of 42 is near its 26-week average of 40 according to Track Data, suggesting non-directional price risks.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
Among companies reporting quarterly earnings on Thursday were Safeway Stores Inc. (NYSE: SWY), the largest food retailer in North America, and Newmont Mining Corp. (NYSE: NEM), one of the world's largest gold producers.
Despite ongoing efforts to upgrade the image of its stores, Safeway, which reported that fourth-quarter earnings in-line with the consensus estimates of analysts surveyed by Thomson Financial, also reported that same-store sales slowed.
The quarterly earnings came to $301.1 million, or 68 cents per share, for the period that ended December 29, down 2% from $307.9 million, or 69 cents per share, in the same quarter of 2006, when tax benefits lifted results. Excluding that gain, earnings per share would have climbed by more than 11%. Fourth-quarter revenue rose 7% to $13.36 billion, which beat the analysts' average estimates.
Despite signs of a slowdown, the fourth quarter capped Safeway's most profitable year since 2001. The company earned $888.4 million, or $1.99 per share, on sales of $42.3 billion, compared to earnings of $870.6 million, or $1.94 per share, on revenue of $40.2 billion in 2006. For 2008, Safeway forecast earnings of $2.25 to $2.35 per share, in-line with analysts' expectations.
Safeway shares fell more than $3 in morning trading, reaching a new 52-week low of $28.80.
Barrick Gold Corporation (NYSE: ABX) acquires, explores and develops mining properties. Products include gold, copper, silver and zinc. The firm is the top producer of gold in the world, taking eight million ounces annually from nearly thirty mines in North America, South America, Australia-Pacific and Africa. It has proven and probable mineral reserves of over 120 million ounces of gold, 6 billion pounds of copper and 964 million ounces of silver. Major competitors include Newmont Mining (NYSE: NEM) and Rio Tinto (NYSE: RTP).
The stock popped over the past week, as analysts predicted further upside in the price of gold. They anticipated that the prospect of more Federal Reserve rate cuts will continue to weigh on the dollar and expected that more investors will turn to gold as a hedge against inflation. The shares have begun to consolidate the gain in a bullish "pennant" pattern. Equities frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Normally, I try to avoid overall market prediction. I think it's a waste of time. But just as my Scooby sense told me that Solarfun (NASDAQ: SOLF) looked ripe for a fall yesterday -- even as the stock was breaking out to new highs on news of yet another contract -- I'm feeling pretty bearish on the overall stock market for 2008.
I won't bet on it because a.) I don't have the patience and b.) I'm a momentum stock trader, what do I know about the macro picture? But that's the beauty of blogging; it's all about the sharing of ideas. And since, even with all my mistakes, my cumulative nine-year investment return is 4,832% (a little better than most, as detailed in my book), I know a little something about nearly everything stock market related and maybe I might be able to make/save you a buck or two. So, here we go, please comment as I'd like to get your opinion too!
Sure, today's jobs report is tanking the market and bringing up recession talk, but this is just a blip in the grand scheme of things. For the past few weeks/months, the stock market has been heading lower and there are tons of articles talking about how 2008 is going be another tough year for the stock market. (As if a 10% year for the Nasdaq is "a tough year" LOL, you spoiled, spoiled people, you ain't seen nothin' yet!)
Newmont Mining Corp. (NYSE: NEM) stock is rising this morning, helped by positive movement in gold futures, which crept above $815 an ounce for February delivery, its strongest level since Nov 28. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on NEM.
After hitting a one-year low of $38.01 in August, the stock hit a one-year high of $56.35 in November. NEM opened this morning at $50.72. So far today the stock has hit a low of $50.49 and a high of $51.34. As of 11:05, NEM is trading at $51.17, up $1.14 (2.3%). The chart for NEM looks bullish but deteriorating, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider a January bull-put credit spread below the $45 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 11.1% return in just 6 weeks as long as NEM is above $45 at January expiration. Newmont would have to fall by more than 11% before we would start to lose money. Learn more about this type of trade here.
Where can you find the "Wall Street of the West?" In Colorado, of course -- specifically, Denver's 17th Street financial district.
Colorado's economy has come a long way from its foundation on trapping and mining. Denver's location, equidistant between Los Angeles and Chicago, between Seattle and New Orleans, has helped the Centennial State become the economic center of Rocky Mountain states -- even Denver's time zone and elevation help it keep in touch with the rest of the world. It's no wonder there's a large federal government presence in the state (U.S. Air Force Academy, NORAD, NOAA, Denver Mint, U.S. Geological Survey).
Newmont Mining Corp. (NYSE: NEM), the world's largest non-hedged gold producer, closed at $54.50. Gold is recently up 2.36% to $842.80, according to Bloomberg. NEM November option implied volatility is at 44, December is at 42 above its 26-week average of 33 according to Track Data suggesting larger price risks.
Freeport McMoRan Copper & Gold (NYSE: FCX) closed at $113.50. FCX, is engaged in copper, gold and silver mining and production operations. Gold is recently up 2.36% to $842.80 according to Bloomberg. FCX over all option implied volatility of 46 is above its 26-week average of 43 according to Track Data, suggesting larger risk.
Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
MOST NOTEWORTHY: DPL Inc, IAC/InterActiveCorp, F5 Networks, Community Health and Parametric Technology were today's noteworthy upgrades:
Baird upgraded DPL Inc (NYSE: DPL) to Outperform from Neutral following better-than-expected guidance.
Citigroup upgraded IAC/InterActiveCorp (NASDAQ: IACI) to Buy from Hold as they believe HSN's turnaround, Lending Tree's stabilization and Ask's profitability ramp should drive EBITDA growth acceleration in 2008. The company was also upgraded to Overweight from Equal Weight at Lehman following IAC's better-than-expected Q3 report.
Citigroup upgraded shares of F5 Networks Inc (NASDAQ: FFIV) to Buy from Hold, as they believe now is the time to buy the stock with sentiment at a low-point heading into an attractive 2008 product cycle.
Stifel raised its rating on Community Health Systems Inc (NYSE: CYH) to Buy from Hold based on improved visibility from detailed 2008 guidance.
NEM reported third quarter earnings per share of 72 cents verses consensus estimates of 25 cents. Gold was recently up .95% to $795.30 according to Bloomberg. NEM call option volume of 68,640 contracts compares to put volume of 36,594 contracts. NEM November option implied volatility of 38 was above its 26-week average of 32 according to Track Data, suggesting non-directional price risks.
BAC call option volume of 13,902 contracts compared to put volume of 4,588 contracts. BAC November option implied volatility of 28 was above its 26-week average of 23 according to Track Data, suggesting larger risk.
Volatility Index: VIX down 2.35 to 18.34, suggesting less risk after rate cut.
Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
Newmont Mining Corp. (NYSE: NEM) stock is soaring to a new 52-week high today after the company's third quarter earnings release. Profit in the quarter doubled to $0.88 per share, obliterating analyst expectations of $0.25 per share profits. Even though gold futures are relatively flat today, prices have been rising recently, lifting the outlook for NEM. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on NEM.
After hitting a one year low of $48.42 in the summer, the stock has risen quite a bit, settling in above the $45 mark with recent resistance around $48 until today. NEM opened this morning at $47.40. So far today the stock has hit a low of $47.14 and a high of $50.63. As of 10:45, NEM is trading at $50.53, up $4.09 (8.8%). The chart for NEM looks bullish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider a December bull-put credit spread below the $42.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 5.3% return in just 7 weeks as long as NEM is above $42.50 at December expiration. Newmont would have to fall by more than 15% before we would start to lose money.
Newmont, which is currently the world's second largest gold producer, has had partial ownership of MNG since 2005 when it acquired a 9.9% stake in the company after investing $36.4 million in a Canadian gold field known as the Hope Bay gold belt. Miramar's board has unanimously agreed to Newmont's take over bid and will be recommending that the company's shareholders approve the deal.
Shares of MNG have been soaring today on the announcement. After closing yesterday at $5.15, the stock has sky rocketed today, picking up 22.5% to $6.31, up $1.16. Newmont shares have also been rising today, picking up 2.0% to $45.73, up $0.90.
Full details on the takeover will be made available by the end of this month.
Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer
Newmont Mining Corp. (NYSE: NEM) stock is dropping today as gold futures are falling hard (more than 2%) in this morning's market. Gold is falling as the dollar regains some of the ground it has lost recently. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on NEM.
The stock leapt last month from trading near its year low to a 52-week high of $48.42 on September 24, but quickly retreated to the mid-$40's. This morning, NEM opened at $45.45. So far today the stock has hit a low of $44.70 and a high of $45.48. As of 10:35, NEM is trading at $44.75, down $1.25 (-2.7%). The chart for NEM looks bullish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bearish hedged play on this stock, I would consider a November bear-call credit spread above the $50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 13.6% return in 7 weeks as long as NEM is below $50 at November expiration. Newmont would have to rise by more than 11% before we would start to lose money.
Newmont Mining (NYSE: NEM) shares are trading higher today as gold futures prices have risen to break above $900 per ounce once more. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on NEM.
Newmont Mining
prospect of more Federal Reserve rate cuts will continue to weigh on the dollar and expected that more investors will turn to gold as a hedge against inflation. The shares have begun to consolidate the gain in a bullish "pennant" pattern. Equities frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Normally, I try to avoid overall market prediction. I think it's a waste of time. But just as 
Where can you find the "Wall Street of the West?" In Colorado, of course -- specifically, Denver's 17th Street financial district. 
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Newmont Mining Corporation
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