Update: Barrick Reports Increased Resources at Fourmile Project; Talks of "Exciting New Frontiers" In South America

For those looking to find strong Basic Materials stocks, it is prudent to search for companies in the group that are outperforming their peers. Is Newmont Corporation (NEM) one of those stocks right now? By taking a look at the stock's year-to-date performance in comparison to its Basic Materials peers, we might be able to answer that question.

Newmont Corporation is a member of the Basic Materials sector. This group includes 235 individual stocks and currently holds a Zacks Sector Rank of #13. The Zacks Sector Rank includes 16 different groups and is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors.

The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. Newmont Corporation is currently sporting a Zacks Rank of #2 (Buy).

The Zacks Consensus Estimate for NEM's full-year earnings has moved 8.2% higher within the past quarter. This is a sign of improving analyst sentiment and a positive earnings outlook trend.

Based on the latest available data, NEM has gained about 4.7% so far this year. In comparison, Basic Materials companies have returned an average of -2.3%. This shows that Newmont Corporation is outperforming its peers so far this year.

Another stock in the Basic Materials sector, Agnico Eagle Mines (AEM), has outperformed the sector so far this year. The stock's year-to-date return is 52.4%.

Over the past three months, Agnico Eagle Mines' consensus EPS estimate for the current year has increased 10.7%. The stock currently has a Zacks Rank #1 (Strong Buy).

Looking more specifically, Newmont Corporation belongs to the Mining - Gold industry, which includes 38 individual stocks and currently sits at #40 in the Zacks Industry Rank. This group has gained an average of 19% so far this year, so NEM is slightly underperforming its industry in this area. Agnico Eagle Mines is also part of the same industry.

Investors with an interest in Basic Materials stocks should continue to track Newmont Corporation and Agnico Eagle Mines. These stocks will be looking to continue their solid performance.

Zacks Investment Research

Investors in Barrick Gold Corporation GOLD need to pay close attention to the stock based on moves in the options market lately. That is because the Dec 20, 2024 $3 Call had some of the highest implied volatility of all equity options today.

What is Implied Volatility?

Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.

What do the Analysts Think?

Clearly, options traders are pricing in a big move for Barrick Gold shares, but what is the fundamental picture for the company? Currently, Barrick Gold is a Zacks Rank #2 (Buy) in the Mining - Gold industry that ranks in the Top 15% of our Zacks Industry Rank. Over the last 30 days, two analysts have increased their earnings estimates for the current quarter, while one analyst has revised the estimate downward. The net effect has taken our Zacks Consensus Estimate for the current quarter from 40 cents per share to 44 cents in that period.

Given the way analysts feel about Barrick Gold right now, this huge implied volatility could mean there’s a trade developing. Oftentimes, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.

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Zacks Investment Research