Barrick Gold Corp. ( ABX ) fell over '…% in -…-5, as the gold price moved from $-,-94.4… per ounce to a low of $-,…6- per ounce. However, -…-6 reveals a different kind of story, as the stock is up more than -……% year to date on the back of improving gold prices .
After missing revenue estimates in the first and second quarter this year, the company shared healthy third quarter results. In the third quarter of FY -…-6, the company detailed earnings per share of -4 cents, exceeding the analyst estimates by 4 cents, whereas revenue came in at $-.'… billion, $7… million greater than the consensus estimates.
However, things suddenly changed as the gold price declined over $--… per ounce from its high since Donald Trump was elected the next U.S. president. But, it's a short-term concern, as gold price is projected to climb sharply in the next five years. According to goldstockbull.com, the gold price could eventually hit $5,……… per ounce by -…-….
Moreover, gold, often regarded as a safe investment in times of economic pressure, is also a sturdy bet when yields are being crushed by belligerent financial policy.
In the case of Barrick Gold, one of the most significant things that helped the company to gain a lead over its competitor is its continuously decreasing expenditures. The company projects just $-.-5 billion in spending at the midpoint as per its third-quarter update for full-year Capex in -…-6, a drop of $4.75 billion compared to the forecast offered by the company in -…-'.
Moreover, the company looks aggressively focused on reducing its debt, as its overall debt now accounts for $-… billion, down from $-'.- billion in -…-4. The company sold its non-core assets in -…-5 to reduce its debt. Moving onward, the company endured following a logical approach this year, with an objective to reduce $- billion in debt.
However, the company accomplished that goal after concluding a $65… million cash tender proposal for some of its outstanding notes. But, the thing worth noticing is that the company did not sell any assets in -…-6 to achieve its goal. Instead, the company profited from improving gold prices and cost cutbacks to produce enough cash flow to achieve the mark.
Barrick Gold is headed in the right direction, as the company successfully accomplished its -…-6 goal of reducing its debt by another $- billion, which is a great victory for the company. Moreover, the company is known for its lowest all-in sustaining costs.
Therefore, as long as the company can sustain AISC substantially less than commercial gold prices and continue to cut down its overall debt, it will continue to beat its rivals. Barrick Gold is down almost '-% from its 5--week high, which looks like a great entry point for stockholders.
Barrick Gold is a strong buy keeping in mind the positive gold price forecast.
Disclosure: No position in the stocks mentioned in this article.
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