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Is Barrick Gold a long or a short? (ABX, GLRE)

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John Burbank of Passport Capital recently established a massive short position on Barrick Gold Corporation ( ABX , quote ). Over the same period, David Einhorn of Greenlight Capital ( GLRE , quote ) bought 1.35 million Barrick shares.

So far, John Burbank and the investors of Passport Capital are winning -- and profiting.

Barrick Gold (ABX), based in Toronto, is down more than 6% for the week, more than 4% for the month, and more than 8% for the quarter. For the year, it is off by more than 6%.

On the other hand, every number except the only one that matters, the stock price, supports Einhorn's long strategy.

ABX has a profit margin of 33%. The price-to-earnings ratio, now 11.37, is projected to fall to 8.42 over the next year. On a quarter-by-quarter basis, sales growth is higher by more than 43% and earnings growth is higher by over 46%.

Barrick Gold (ABX) even pays a modest dividend of 1.21% with a payout ratio of just 10.95% that will easily allow for it to be increased.

Now around $49.59, the mean analyst target price for Barrick Gold Corporation over the next year is $66.14 and the mean analyst rating is 1.8 -- bullish, given the fact that a "5" is the lowest and a "1" is the highest, representing a "strong buy."

In any event, the short float for Barrick Gold Corporation is infinitesimal at only 0.55%.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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