- By Alberto Abaterusso
Barrick Gold Corp. (ABX) continues its downtrending course. For the 52-weeks that ended on Friday, the stock experienced a 36% loss. Since the beginning of 2018, the world's largest gold producer lost more than 24%.
The last negative performance of Barrick Gold Corp was exacerbated by the news that Citigroup has reaffirmed its sell rating on shares of the company, according to a note research dispatched on Thursday. Citigroup has also maintained its price target at $11 per share of Barrick Gold Corp.
Citigroup's reiterated price target plus Morgan Stanley's decision on Wednesday to decrease its price target to $15 per share, should drag the average target price of Barrick Gold Corp down at around $16.09, which is a nearly 2% decline from the current mean of $16.39.
The current average target price is the result of 21 estimates of analysts who were surveyed. These estimates range between a low limit of $11 per share, which will stay unchanged after the recent analysts' notes, and a high limit of $20.27 per share.
A further depreciation of the stock over the next days of trading is possible following Argus' downgrade rating on shares of Barrick Gold of last Friday. As of March 4, Barrick Gold Corp. is trading cheaply with a market valuation that is below the 200, 100 and also the 50-SMA lines.
For the 52-weeks through March 2, Barrick Gold Corp has underperformed the VanEck Vectors Gold Miners ETF (GDX) by 35.3%. The current share price is just a few cents above the 52-week low of $11.07, while the 52-week high is $20.36 per share. Also, this metric, together with a price-book (P/B) ratio of 1.46 times (the industry median is 2.05 times) and an EV-to-Ebitda ratio of 3.87 times (the industry average is 10.18 times), is additional evidence that the stock is offering a very convenient entry point at the moment.
Investors may want to consider a buy approach on Barrick Gold to get exposure to the yellow metal in 2018. The company is not only the biggest producer of gold in the world but also a portfolio that consists of some of the best gold assets, globally speaking.
With a volume of 64.5 million ounces in proven and probable gold reserves, Barrick Gold Corp. assets base can also be replicated by Newmont Mining Corporation (NEM). The U.S. miner has approximately 68.5 million ounces of attributable gold in proven and probable reserves as of Dec. 30, 2017 statement on resources and reserves.
In addition, there is another metric I like to consider when screening for gold stocks, which is the EVO (Enterprise Value per ounce of gold reserves). Barrick Gold Corp has an EVO of $299.53, which is close to Newmont Mining Corp.s EVO of $307.6. The other most direct peer of Barrick Gold Corp. is Goldcorp, who has an EVO of $250.
Barrick Gold Corp. is currently reporting a market capitalization of $13.4 billion for a total volume of shares outstanding of 1.17 billion, of which 58.96% is the institutional ownership.
Among the top shareholders of Barrick Gold Corporation, the holder Van Eck Associates Corp. stands out with 3.85% of total shares outstanding.
Van Eck Associates Corporation is followed by First Eagle Investment (Trades, Portfolio) Management, LLC with a 3.01% and by Franklin Resources, Inc, with a 2.91%. These figures on holdings are as of Dec. 30, 2017.
(Disclosure:I have no positions in any stock mentioned in this article.)
This article first appeared on GuruFocus.