Yamana Gold (AUY, Financial) plummeted on Friday, Feb. 16 at market close.
Yamana Gold lost nearly 9.6% to $3.12 on the New York Stock Exchange following the results in the fourth quarter of fiscal 2017.
The company reported a loss of 20 cents. Consensus was for a profit of 3 cents (U.S. dollars) per share.
Fourth quarter revenue came in at $478.78 million, a 1.2% decline on a year over year basis. The Canadian mid-tier gold producer beat consensus by $16.8 million.
The miner closed the fourth quarter of fiscal 2017 with a gold production of 259,606 ounces, a silver production of 1.17 million ounces and a copper production of 34.7 million pounds.
For full fiscal 2018, Yamana Gold predicts a total production of 1.013 million ounces of equivalent gold and a total gold output of 900,000 ounces.
The company also provided the market with expectations on equivalent gold production for full fiscal 2019 (approximately 1.084 million ounces) and for full fiscal 2020 (about 1.149 million ounces). The production of the yellow metal is anticipated by Yamana Gold to rise mainly because of increases at Canadian Malartic, Jacobina and Minera Florida, and thanks to the addition of Cerro Moro, reported the company.
Following Friday’s fall, Yamana Gold bottomed at its 50-SMA line again, but it is still far above the 100 and 200-SMA lines.
Perhaps the time for either increasing the holding of Yamana Gold or starting a position is yet here, also because the current share price is still above the midpoint of a $2.21 to $3.80 per share 52-week range and the Relative Strength Indicator’s (14-days) curve is in its descending phase. The RSI is currently 43.85 of a 25 to 75 range.
The average target price of $3.86 tells that investors can profit from a 24% stock appreciation if they step in Yamana Gold today. But for a buy approach with Yamana Gold, I would wait a bit longer giving time to the market to process the fourth quarter loss.
About Yamana Gold in 2018, the stock should factor a step change the Canadian miner hopes to deliver in the free cash flow over the first part of the current year.
(Disclosure: I have no positions in any security mentioned in this article.)
