#3: Newmont Mining
Newmont Mining (NEM) is one of the largest gold miners in the world — or at least, one of the largest miners primarily focused on gold. So it’s no surprise that with gold prices off about 25% this year that Newmont has felt the pain.
But why an even bigger flop for the gold miner vs. the precious metal?
Well, for starters, consider that Newmont is in the uncomfortable position of financing a highly capital-intensive mining operation. That means it has had to issue more shares to raise cash in recent years and take on more debt — something that seemed like a good idea in 2009 and 2010 when gold prices were sky-high, but something that accelerated the stock’s decline once things turned.
Throw in the fact that NEM was paying a dividend of 43 cents a share to start the year but just paid 25 cents a share in September — a 41% dividend cut in just a few months — and you can understand why traders are fleeing Newmont faster than they are giving up on gold.