Randgold Resources (NASDAQ:GOLD) — For months, gold bullion has been running ahead of the mining stocks. But miners forged ahead in Q3 as higher earnings from increasingly better bullion prices improved their outlook.
With the rise in the price of gold, Randgold was expected to increase sales by 112% in 2011 versus an 8.9% gain in 2010. But a lower revision of Q4 earnings due to temporary operating problems at several mines drove GOLD’s price from $115 to under $100. However, earnings are expected to rebound to $6.74 in 2012 from $3.52 in 2011.
S&P has a “four-star buy” on GOLD with a price target of $140 to $150 within 12 months.
Technically the recent break from over $115 offers gold investors an excellent opportunity to purchase this quality mining stock at a discounted price. The trading target for GOLD is $120 within 90 days.