Gold Stocks for a Breakout: Randgold Resources (GOLD)
Thanks to its vast mining project networks throughout the African continent, Randgold Resources Ltd. (ADR) (NASDAQ:GOLD) was better able to survive the commodities onslaught than lesser-capitalized gold stocks. Randgold also brought home an important earnings beat in the first quarter of fiscal 2017. Prior to that report, GOLD suffered three consecutive earnings misses.
Indeed, Randgold may have chosen the perfect time to right its ship. On a YTD basis, GOLD stock is up 17.5%, beating benchmark indices by a comfortable margin. The mining company has also performed remarkably better than rival gold stocks. For instance, the Market Vectors Gold Miners ETF (NYSEARCA:GDX) is only up a little over 5% YTD.
Should the underlying precious metals market find solid traction, I fully expect GOLD to shoot significantly higher.
Technically, Randgold shares are supported by a generally rising trend channel. This dynamic is bolstered by the company’s strong profitability margins and top-line growth. Many of the weaknesses and underperforming assets have been cleaned out in prior bearish cycles. Today, GOLD stock is leaner and meaner. Should gold prices cooperate, the mining stalwart could easily become a high-flyer.
In other words, double-digit returns aren’t shabby at all, but imagine if the headwind flipped itself around?