The junior gold miners’ stocks suffered a serious thrashing between mid-April and early May. Relentless heavy selling blasted many back down near deep mid-December lows, leaving sentiment in tatters. But traders distracted by weak technicals need to keep their eyes on the fundamental ball. The gold juniors just finished their Q1 earnings season, which was solid. Their low stock prices are disconnected from reality.
Four times a year publicly-traded companies release treasure troves of valuable information in the form of quarterly reports. These are generally due by 45 days after quarter-ends in the US and Canada. They offer true and clear snapshots of what’s really going on operationally, shattering the misconceptions bred by the ever-shifting winds of sentiment. There’s no junior-gold-miner data that is more highly anticipated.
Until later last year, the definitive list of elite junior gold stocks to analyze came from the world’s most-popular junior-gold-stock investment vehicle. The GDXJ VanEck Vectors Junior Gold Miners ETF was born in November 2009, and is the second-largest gold-stock ETF after its big brother GDX which tracks the larger major gold miners. Investors love junior gold miners’ stellar potential, so GDXJ has been very popular.
Unfortunately this fame has recently created major problems severely hobbling the usefulness of GDXJ. This sector ETF has shifted from being beneficial for junior gold miners to outright harming them. GDXJ is literally advertised as a ‘Junior Gold Miners ETF’. Investors only buy GDXJ shares because they think this ETF gives them direct exposure to junior gold miners’ stocks. But that’s increasingly becoming less true.
This post was published at ZEAL LLC on May 19, 2017.
Follow on Twitter
Recent Comments