Obviously different stocks follow the gold price to greater / lesser degrees for a number of different reasons including their cost of production, level of hedging, operational performance and the like. When we look at the correlation between Northern Star (NST) and the gold price the obvious call is it’s cheap but the company has still to answer some synergy questions since its merger with Saracen Minerals however we do like the deal overall i.e. The gold price is not the only matrix which drives stocks in the sector but obviously it does have a huge influence. We like NST but would leave room to average into any future underperformance.
MM likes NST into current weakness
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Northern Star Resources (NST) v Gold ($A/oz.)
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Northern Star Resources (NST) v Gold ($A/oz.)
