Gold stock to sell #1: Barrick Gold (ABX)

Posted Sep 12th 2009 11:00AM by Jamie Dlugosch
Filed under: Barrick Gold (ABX), Stocks to Sell

Barrick Gold Corp. (NYSE: ABX) announced that it would begin eliminating its hedges against a collapse in gold prices.

In so doing, the company is raising some $3 billion with the sale of stock that will dilute current shareholders.

While the gold hedges may have acted as a brake on revenues and profits in a rising gold price environment, the strategy was prudent.

To eliminate the hedge now when gold hits $1,000 is either a sign of the apocalypse or an incredibly stupid thing to do.

Since I don't believe in the apocalypse, I will say that the covering of the hedge is incredibly stupid. To me, it is a sure sign that gold prices have peaked. This move by management does not give one confidence in its ability to run the company.

I would sell ABX for this reason alone.

Next: Gold Stock to Sell #2

Tags: ABX, barrick gold, gold stocks, jamie dlugosch, stocks to sell

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Reader Comments (Page 1 of 1)

9-14-2009 @ 11:22AM

tommy said...

I believe gold at 1000.00 dollars an ounce has peaked and only will move down from here. I actually am shorting gold right now. Also just liquidated all my physical gold to an online refrinery called http://empiregoldbuyers.com . Hope this info helps someone. Thnaks

11-10-2009 @ 8:09AM

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