New Investment Idea: Gold Fields
09-07-2024
START - R292.81 | FINISH - R364.02
Major points:
- HORIZON: 4 months
- MANAGEMENT ASSESSMENT: 24.32% growth
- RECOMMENDATION: BUY
TRADING PLAN:
Buy Gold Fields Ltd (GFI) shares from the R292.81 level with a target of R364.02 for 4 months.
WHY THESE SHARES HAVE POTENTIAL FOR PROFIT
- Gold Fields’ South Deep holds one of the largest unmined gold resources globally. Substantial investments are starting to yield results, with production expected to increase by 25% over the next four years.
- There’s a focus on developing the Salares Norte gold mine in Chile which will diversify the company's asset base. Plans to list on the Toronto Stock Exchange could potentially increase visibility and attract more investors.
- Gold Fields has maintained an upward trend in the gold market over the past five years, indicating resilience and growth potential.
- GFI has made a commitment to pay out 30% - 45% of profits as dividends, providing consistent returns to shareholders.
INDICATORS
- Forward P/E ratio – 11.90x
- Dividend yield – 2.65%
- The company’s balance sheet metrics are strong:
- GFI has total assets of R150.44B and total equity of R84.46B.
- It has R11.86B cash on hand
- It has a current ratio of 1.15
GROWTH FORECAST:
- 1 Year EPS: R8.61
RISKS
- Operational and Environmental Challenges: Recent weather related disruptions at Salares Norte impacted production, resulting in an 18% Y-o-Y drop in the first quarter of 2024. Additionally, there are environmental permitting issues, such as the chinchilla relocation at Salares Norte mine.
- Commodity Price Fluctuations: Gold Fields remains subject to the volatility of global gold prices that impact profitability and stock performance.
Disclaimer:
Any opinions, views, analysis or other information provided in this article is provided by BCS Markets SA trading as BROKSTOCK as general market commentary and should not be viewed as advice according to the FAIS Act of 2002. BCS Markets SA does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information provided by third parties. You must rely upon your judgement in all aspects of your investment decisions and all decisions are made at your own risk. BCS Markets SA and any of its employees shall not be responsible for and will not accept any liability for any direct or indirect loss including without limitation any loss of profit which may arise directly or indirectly from use of the market commentary. The content contained within the article is subject to change at any time without notice. BCS Markets SA is an authorized financial services provider FSP No. 51404.
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BCS Markets SA (Pty) Ltd. is an authorized Financial Service Provider and is regulated by the South African Financial Sector Conduct Authority (FSP No.51404). BCS Markets SA Proprietary Limited trading as BROKSTOCK.
The materials on this website (the “Site”) are intended for informational purposes only. Use of and access to the Site and the information, materials, services, and other content available on or through the Site (“Content”) are subject to the laws of South Africa.
Risk notice Margin trading in financial instruments carries a high level of risk, and may not be suitable for all users. It is essential to understand that investing in financial instruments requires extensive knowledge and significant experience in the investment field, as well as an understanding of the nature and complexity of financial instruments, and the ability to determine the volume of investment and assess the associated risks. BCS Markets SA (Pty) Ltd pays attention to the fact that quotes, charts and conversion rates, prices, analytic indicators and other data presented on this website may not correspond to quotes on trading platforms and are not necessarily real-time nor accurate. The delay of the data in relation to real-time is equal to 15 minutes but is not limited. This indicates that prices may differ from actual prices in the relevant market, and are not suitable for trading purposes. Before deciding to trade the products offered by BCS Markets SA (Pty) Ltd., a user should carefully consider his objectives, financial position, needs and level of experience. The Content is for informational purposes only and it should not construe any such information or other material as legal, tax, investment, financial, or other advice. BCS Markets SA (Pty) Ltd will not accept any liability for loss or damage as a result of reliance on the information contained within this Site including data, quotes, conversion rates, etc.
Third party content BCS Markets SA (Pty) Ltd. may provide materials produced by third parties or links to other websites. Such materials and websites are provided by third parties and are not under BCS Markets SA (Pty) Ltd.'s direct control. In exchange for using the Site, the user agrees not to hold BCS Markets SA (Pty) Ltd., its affiliates or any third party service provider liable for any possible claim for damages arising from any decision user makes based on information or other Content made available to the user through the Site.
Limitation of liability The user’s exclusive remedy for dissatisfaction with the Site and Content is to discontinue using the Site and Content. BCS Markets SA (Pty) Ltd. is not liable for any direct, indirect, incidental, consequential, special or punitive damages. Working with BCS Markets SA you are trading share CFDs. When trading CFDs on shares you do not own the underlying asset. Share CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. A high percentage of retail traders accounts lose money when trading CFDs with their provider. All rights reserved. Any use of Site materials without permission is prohibited.