CNMC Goldmine (5TP)

 

Share Price when postedShort Term ViewLong Term ViewCurrent Share Price
0.415FA & TA BullishFA & TA BullishSGX:5TP: (%)

 

With all the tension going on globally (US, Russia, Syria, North Korea etc), investors would generally be in a “risk off”  mode and flight towards safe heaven assets such as gold.

Lets take a closer look at the gold chart:

 

Points to note from the gold chart:

  1. Gold has changed from short term bear into short and long term bull. Immediate price satisfaction level would be around 1370.
  2. News such as Interest rates rising at slower pace, global tension, Brexit etc coincides nicely with the new trend of gold
  3. USD (largely having inverse relationship with gold) have been coming off recently

As an investor, we can choose to buy physical gold or futures contract in gold. However, as the price is 12xx, we would need to see large move of gold prices to have attractive % yield in our investments. So, what are the other alternatives?   Invest in gold mining companies that are listed!

Upon a closer look at SGX, our team has found this company – CNMC Goldmine.

Fundamental Analysis:

  1. Revenue & Profits increase Year on Year consistently
  2. Debt Free (Quite rare for mining company to achieve debt free situation)
  3. Recently extended large scale mining License with Malaysia govt until 2030+
  4. Able to achieve relatively lower all in cost of production of around US 700/ounce (Margin of US 500+ at today’s price)
  5. Management delivers what he promised over past years
  6. Situated in the right time to capitalize the opportunity of gold bull
  7. Increasing dividend yield (dividend is paid out of cash instead of debt)
  8. Current share price is much below Intrinsic Value to have a margin of safety
  9. Expanded inorganically through acquisition of Pulai mining to reduce risk of single location dependency

Conclusion from FA – Bullish

 

Technical Analysis:

  1. Support formed at 0.38 (Lower level support of 0.29 would be seen as a treacherous back testing by the BBs)
  2. Immediate term bullish to move to 0.445, possible to re-test 0.6 when gold price increases
  3. Stock is not overbought yet

Conclusion from TA – Bullish

 

 

P.s. Do create an account in www.investwhizz.com as we have automated FA & TA tools along with stock screener to save your valuable time in this journey!