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Alberto Abaterusso
Alberto Abaterusso
Articles (1293) 

The Vanguard Group Increases Stake in Newmont Mining

The U.S. investment advisor also bought Hecla Mining Company

February 12, 2018

The Vanguard Group has increased its stake in Newmont Mining Corporation (NEM) and in Hecla Mining Company (HL).

According to the Schedule 13G SEC filing, the Vanguard Group currently holds a volume of 55,585,107 ordinary shares or 10.42% of Newmont Mining corporation. This percentage of ownership represents a 1.4% increase from Sept. 29, 2017, when the U.S. investment advisor declared a 10.28% ownership in the U.S. gold mining company for a total volume of 54,812,327 shares.

The Vanguard Group has sole power to dispose shares of Newmont Mining Corporation on approximately 98.26% of the aggregate number of shares beneficially owned.

The Vanguard Group also reported its new holding of Hecla Mining Company. The U.S. investment advisor has increased its stake in Hecla Mining by nearly 2.5% to a volume of 33,620,781 shares of the miner or 8.42% from a volume of 32,805,770 shares or 8.22% as of Sept. 29, 2017.

The sole dispositive power of the Vanguard Group on the total amount of Hecla Mining’s beneficially owned shares is about 98.57%.

Among the top institutional holders of Hecla Mining Company, Dimensional Fund Advisors LP has also updated the market with its new holding. The U.S. investment company, which is headquartered in Austin (Texas), disclosed to beneficially own 33,563,141 shares of Hecla Mining or 8.41%. This is a 0.08% increase from Sept. 29, 2017, when Dimensional Fund Advisors LP reported to have 33,535,987 ordinary shares of Hecla Mining, or 8.40%. The Texas investment firm has a sole voting power on about 98.3% of the total holding and the right to dispose shares of Hecla Mining on the total amount beneficially owned.

This information may signal that shares of Newmont Mining and Hecla Mining will soar soon.

Newmont Mining Corporation (NEM) is currently trading at $36.76 per share on the New York Stock Exchange with a market capitalization of $19.605 billion, a price-book (P/B) ratio of 1.76 times and an EV-to-Ebitda ratio of 14.38 times. The 52-week range is $31.42 to $42.04 per share.

While Hecla Mining Company (HL) is currently trading at $3.49 per share on the New York Stock Exchange, with a market capitalization of $1.393 billion, a price-book (P/B) ratio of 0.92 times and an EV-to-Ebitda ratio of 10.27. Hecla Mining is trading about 3.3% above the 52-week low of $3.38. The 52-week high of $6.72 per share represents a nearly 93% appreciation of the current market value.

According to Yahoo Finance’s chart, the two gold stocks are down trending since Jan. 24 as well the VanEck Vectors Gold Miners ETF (GDX). For the 52-week through Feb. 9 Newmont Mining Corp lost 1.66% while Hecla Mining Corp fell with a sharply 46%.

Source: Yahoo Finance

Over the same span of time, the exchange-traded fund has been outperformed by Newmont Mining Corp with 11.45% and underperformed by Hecla Mining Company with 33.12%.
The index is the most liquid vehicle to gain exposure to the gold mining industry which price-book (P/B) ratio is 2.05 times and EV-to-Ebitda ratio is 10.18 times.

Analysts are on average for a buy recommendation on both gold mining stocks. Concerning Newmont Mining, the average target price is $43.06 per share; on Hecla Mining’s share, the price target averages $2.5.

(Disclosure: I have no positions in any security mentioned in this article.)

About the author:

Alberto Abaterusso
If somebody asks what being a Value Investor means, Alberto Abaterusso would answer: “the Value Investor is not the possessor of a security that represents the company, but he is the owner of that company. As an owner of the company the Value Investor is actively involved in the dynamics of that company and his first aim is how to have sales progressively growing.”

Alberto Abaterusso would add: “probably the Value Investor is one of the least patient persons in the world concerning sales.”

Alberto Abaterusso is a freelance writer based in The Netherlands. He primarily writes about gold, silver and precious metals mining stocks. His articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. Alberto holds an MBA from Università degli Studi di Bari (Italy), Aldo Moro.

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