Yamana Gold, Inc. (NYSE: AUY), a Toronto, Canada-based gold miner with a market capitalization of nearly $8.2 billion.
The fundamentals for Yamana are fair, but I suspect earnings for the three months ending June 30 will come in strong when the quarterly report is released next month. The key factors include the following:
The growth rate for total sales for the most recent quarter versus the same quarter a year earlier comes in at +62.1%. This compares to its industry growth rate of +17.3%. The S&P 500 average growth rate for the same period was +13.5%. The growth rate for total sales for the trailing twelve months versus the trailing twelve months of a year earlier was +63.1%, compared with the industry average growth rate of +60.2% and the S&P 500 average growth rate of +6.9%.My technical assessment of AUY includes the following:
AUY trades in the top of Zone 2 (see grey area in the above chart) and as long as the broader market does not trend appreciably lower, AUY could be buoyed by the rising price of gold. Average daily volume has been increasing in recent weeks on increasing share price. This could be a sign that momentum is building in this stock. Institutional ownership is at 48% -- an indication that the larger institutions have a positive outlook on the stock.Action to Take: Based on the analysis above, I believe AUY is a good trade to put on now with the following trading parameters:
Buy shares of AUY under $10.89 Set an initial stop loss at $10.01 Target price = $15.00Potential Profit = +37.7% |
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