NCM has been even more disappointing than STO when it comes to taking its lead from the underlying commodity prices i.e. the last time gold was above $US2,000/oz NCM was trading around $35, or over 25% higher! This is a great example of the multi layered requirements to deliver alpha (relative portfolio performance) i.e. you can pick the market, sector and commodity perfectly but it still doesn’t mean the company or stock will meet expectations.
In the case of NCM, the Australian gold sector had gotten well ahead of itself in 2022 believing interest rates would stay around zero indefinitely hence when bond yields turned higher too many investors were pointing in the same way and NCM, along with much of the sector, corrected savagely – down 45% in NCM’s case. We currently see further upside in NCM from current levels but around the $29 we will be considering switching as safe-haven buying usually only lasts so long.
MM is considering taking profit on NCM around $29
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Newcrest Mining Ltd (NCM) v Gold ($US/oz)
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Newcrest Mining Ltd (NCM) v Gold ($US/oz)
