Related ABX Market Wrap For April 28: Apple Hits New 52-Week Highs In a Volatile Start To the Trading Week Newmont Responds to Barrick Press Release, Confirms Companies Had Settle Prelim Draft Summary of Indicative Terms M&A Activity Boosts U.S. Stock Futures (Fox Business) A recent article in The Wall Street Journal reported on a possible merger between Barrick Gold (NYSE: ABX) and Newmont Mining Corp (NYSE: NEM), two of the biggest gold mining companies in the world.
The sector is certainly ripe for consolidation, as asset values are very low along with the cost of capital. For investors, here are three ways to profit from deals in gold and silver entities.
As the possible deal between deal Barrick Gold and Newmont Mining indicates, there are gains to be made with the biggest and the best.
Even though Barrick Gold and Newmont Mining are blue chips, the prices are tempting. Barrick Gold is around $17.60 a share, with the Wall Street analyst price target being $20.56 over the next year. Newmont Mining has jumped more than eight percent in recent market action, but it is off over 17 percent for the last year.
Related: 3 Ways To Profit From Merger Activity In The Pharmaceutical Sector
The exchange traded funds are excellent financial vehicles for profiting from deals in gold and silver.
SPDR Gold Shares (NYSE: GLD), the exchange traded fund for gold, is up nearly seven percent for 2014. iShares Silver Trust (NYSE: SLV), the exchange traded fund for silver, does not have the following of SPDR Gold Shares. As a result, it is off for the last week, month, quarter, six months, and year of market action. Due to the nature of the sector, gold will draw the bulk of the investor attention -- keeping with its traditional role as a safe harbor asset.
That greatly favors SPDR Gold Shares over iShares Silver Trust as an investment tool.
Small caps in natural resources with promising holdings are always attractive takeover targets, as detailed in a previous article in Benzinga. That is especially so for those with valuable assets such as Premium Exploration (OTC: PMMEF), a gold company operating in Idaho. Due to tension abroad, investors are willing to pay more for North American gold and silver firms such as Premium Exploration.
The Wall Street Journal reports that talks are still continuing between Newmont Mining and Barrick Gold. That demonstrates there is plenty of dealmaking left in the sector. As such, investors have a myriad of ways to profit from exchange traded funds such as SPDR Gold Shares, to promising small caps such as Premium Exploration.
Posted-In: Gold metals and mining precious metals SilverLong Ideas News Sector ETFs Emerging Markets Wall Street Journal Rumors Small Cap Analysis Commodities M&A Markets Media Trading Ideas ETFs Best of Benzinga
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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