A big picture look at the performance of the gold sector balanced against stocks and broad markets
Jordan Roy-Byrne, Founder of The Daily Gold join us to share his outlook for the gold sector, mostly related to the stocks. We discuss a couple analogs to past gold market corrections, when lead by the stocks, and how investors are viewing the sector over other investment opportunities.
Click here to visit Jordan’s site to keep up to date on his outlook for metals – The Daily Gold.
I would love to see a good technical chart on JAG.
It seems all interest is lost…more reason to own?
I found the JAG discussion in Monday’s Rubino discussions. Thanks
Hi aghead,
Below is a chart of JAG, which highlights the epic move higher in JAG from $0.67 in June of 2019 through the high of $11.04 in Feb of this year, as well as the more than 50% corrective move the stock has had in the last few months as the PM sector corrected. Most of that is clearly profit taking from individuals and institutions, and rightly so as the stock was a 16 bagger in a year and 1/2, but I would not say all interest is lost by any stretch. After the last few months of weakness in the sector, and after having had such a run, it is normal to give back some of those gains, and is why folks should have taken some chips off the table earlier in the year.
Technically, it is still in a somewhat bearish posture, although most of the damage has already been done and it is oversold. I’d submit that recent peak from May of last year at $4.02 should offer a good level of support, but ultimately if someone wants more of a confirmation that the trend has switched back to bullish momentum, then they should be looking for the 55 day EMA (blue line) to retake the 233 day EMA (green line) and then the 144 day EMA (red line) on the chart. Of course, the turn will come before those moving averages catch up, but that would be a more conservative approach to an entry.
FIH, nice dividend in Jaquar but when you say you keep dividend producers in your portfolio but if that the case those that bought this stock for long-term hold got to be sick. Stock is down 50 PCT in 3 months, 100 PCT from yearly highs, something is wrong.
Not many producers are down that much and they don’t even have that high dividend. Just goes to show you nothing is safe, if I’m investing in a producer paying good dividend and I see stock tank like this I be worried.
Jag is a producer but it is also still a junior miner and explorer so we should expect more volatility than the average mid to large cap producer has. In addition, as of February, it had gone up over 1,500% in under two years. Combine that with the sentiment and action in the space and it’s easy to see why it would face extra selling/downside.
You still might be right that something is wrong but I doubt it very much.
Carrying a 6.5 percent dividend now, while Newmont (NEM) is paying 3.7 percent makes absolutely perfect sense and is really even a show of strength since NEM is easily more than twice as safe due to its well diversified portfolio of assets (mines/projects/properties) in the most stable jurisdictions in the world.
No matter what you are buying in any sector, remember that the div yield is a good reflection of risk. That’s why it is said by careful types that one should never chase yield in times of hardship. Instead, one should accept less income go to safety like responsible big boys and girls. But that’s another discussion.
Jag is appealing because of the nice payout and the fact that it is small enough for great drill results to have a big impact on the share price. There aren’t many similar profiles as far as I am aware. Ex can check his lists and let us know.
Agreed Matthew. There aren’t many Junior producers, with the production profile and exploration upside that Jaguar has, granted, it was a more glaring undervaluation in 2019 and the first half of 2020, because it really did finally get re-rated. However, after correcting as hard as it did over the last few months, after having such a big run, it is starting to look increasingly more attractive again down at these prices, especially if folks believe medium to longer term we’ll see higher metals prices, as Jaguar’s margins are highly torqued compared to the much larger producers.
There are a few other smaller producers that are still pretty beaten up at current levels though like Superior Gold, Northern Vertex, Galane Gold, and Harte Gold (but they have a debt problem), and a few others that have a few more warts as to why they are down (like Troy Resources).
I’d submit Galiano Gold is still undervalued based on their profile, but they are still in the midst of a company turnaround, like McEwen Mining, Pure Gold, and Americas Gold & Silver. For those that like “Turn Around” stories, those are one’s worth taking a look at as they are unloved at present.
There are also a few new producers I’m positioned in like Mako Mining, Gold Mountain, and Thor Explorations that have all just gone into production, and the market is not fully appreciating how much exploration growth they have in tandem with a growing production profile.
When I said there aren’t many with similar profiles, I was referring to production and market cap but also the healthy dividend. That part is key and probably drops the pool of peers to virtually zero.
Yes agreed on that point, and it is why Jaguar remains one of my larger holdings in the gold mining space.
I’ve been positioned in Jaguar (JAG) for some time, and bought in tranches at much lower levels, so I’ve been thrilled with their progress the last 2 years and they pay one of the better dividends in the mining sector, because of their production strength. In addition they’ve had quite a bit of success with the drill bit over the last 2 years in expanding their resources and replacing and growing reserves, so that is another front where the company is having success.
If one only focuses on the large corrective move in JAG, which it absolutely has had, then they’d be negating the fact that it outperformed the vast majority of it’s peers in the moves it had last year in 2020 into early 2021, and it is now correcting after a fantastic move higher. This is to be expected after such a huge run.
Keep in mind JAG hit a low in the summer of 2019 of $0.67 when that large fund exited, and then climbed all the way up to a a high of $11.04 this February in 2021.
Please show me the next dozen producers that had moves like that over the same time period…
So let’s keep things in perspective, and not start spreading dis-information that “something is wrong” when there is no factual evidence to support a silly claim like that in the slightest. It’s called a correction, and most of the highly torqued gold miners have also corrected hard the last few months, and not from so high of gains.
Here’s a chart of Jaguar showing the low in 2019, where we had discussed this stock repeatedly on here and I had mentioned all through that summer I was accumulating JAG here on the KER blog. Anyone that did so is still up massively on their position, and if they were wise and trimmed back some gains like I did on (02/03/21) and (02/08/21) then they also locked in some fantastic gains far above the current levels. If anything, I see the current pricing as incredibly attractive to accumulate. I added a tranche on June 17th, and am considering adding some more in the near future.
Jordan you mentioned that you would sell anything that has dropped 20%. Well NFG has dropped more than 20% and I was able to top up that holding for under $10. Maybe you could qualify that statement
Good points, good observations from Cory and Ex.
Thanks Terry.
Michael Boutros on Gold (17:45) : https://www.youtube.com/watch?v=AfxZCcazvyc
Jokrdan, I have always enjoyed your opinions.i will share with my friends here that I try to keep 1/3 of my pm portfolio in income producing pm equities. There don’t seem to be any of our contributors here talking about the value, income opportunities that recently are screaming buy me. As in the case of JAG, paying 6.5% if bought today. That is a very nice income stream. Add the chance of this turning into a multiple bagger in the event pm prices move higher. I’d bet my bottom dollar that Doc has a portion of his portfolio invested in this concept, across all sectors. Anybody else wish to share a stock they would be a really good value play?