Well, that was quick. Warren Buffett bought an approximate stake of US$565 million in Barrick Gold (TSX:ABX)(NYSE:ABX) in Q2 2020. As the Berkshire Hathaway’s 13F filing revealed this Tuesday, he had exited the gold position altogether by the end of 2020.
US$565 million is a lot of money to most people. However, as I pointed out in a previous article, “[I]t’s too much to say Buffett is bullish on gold. Rather, it’s better to say that he is using gold as a hedge for his investment portfolio.”
Barrick Gold composed just 0.28% of the Berkshire stock portfolio at the time. So, it was clearly a hedge. As there was a marked improvement to the global economies towards late 2020, assisted by years of advancement in technology application triggered by the pandemic, Buffett simply saw no reason to keep that hedge in the portfolio.
Despite Warren Buffett being known as a value buy-and-hold investor, there are times that he would hold investments for a short time. Buffett also trimmed positions in Apple and several banks.
ADVERTIsem*nT
Stock investors need to think for themselves in terms of their temperament, financial goals, investment knowledge, risk tolerance, and investment horizon.
This is a good lesson to avoid blindly following the moves of other investors because they are different from you and you would never know other investors’ true meaning in buying or selling a stock.
Should you keep gold stocks in your portfolio?
If you bought gold stocks as a hedge for the pandemic like Warren Buffet did, you might sell, as many of COVID-19’s impacts on the economy have lifted. As well, the market is optimistic about the global rollouts of the vaccine.
However, gold stocks move differently from stock market benchmarks. The 10-year chart below illustrates how Barrick Gold stock tends to fall when the stock market rises and rises when the stock market falls.
Data by YCharts. A 10-year chart displaying a comparison between benchmark TSX:XIU and TSX:ABX.
Portfolio managers ensure its portfolios are sufficiently diversified. Do-it-yourself investors can determine whether having some gold exposure in their portfolio makes sense or not.
As the chart above shows, it would be defensive to have some gold stocks in your portfolio, if you think there could be a substantial stock market correction.
Generally speaking, fund managers don’t advise having more than 5% of one’s investment portfolio exposed to gold.
How is Barrick Gold stock doing?
Barrick Gold sold about 2% less gold and the same amount of copper in 2020 versus 2019. However, its cash flow generation is expected to be higher due to stronger commodity prices. The company will, in fact, be reporting its fourth-quarter and full-year 2020 results today, which will be telling.
The gold stock has been in a downward trend since August 2020 and fallen about 30%, which puts it in a good valuation for accumulation if you’re looking for gold exposure.
Analysts have a 12-month average price target of US$32.23 per share for near-term upside potential of close to 55% from below US$21 per share at writing.
Based on its most recent quarterly dividend of US$0.09 per share, Barrick Gold stock also offers a yield of 1.7%.
The post Warren Buffett Sold Barrick Gold Stock: Should You Sell Gold, Too? appeared first on The Motley Fool Canada.
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Is GOLD a Buy, Sell or Hold? Barrick Gold Corporation has a conensus rating of Strong Buy which is based on 10 buy ratings, 2 hold ratings and 0 sell ratings.
It is clear that Warren Buffett doesn't like gold investments. And the common reason he portrayed is that gold earns nothing if you hold it. The investment decision in Barrick Gold was broadly considered to be made by Berkshire's investment managers Todd Combs or Ted Weschler.
Speaking about gold in the next five years and if it should be part of a value investing strategy, Buffett said he had no opinion on where it might go — “The one thing I can tell you is it won't do anything between now and then except look at you,” he said.
According to Barrick Gold's latest financial reports the company has $3.94 B in cash and cash equivalents. A company's cash on hand also refered as cash/cash equivalents (CCE) and Short-term investments, is the amount of accessible money a business has.
Gold is considered an inflation hedge, and if you think inflation has already tempered or will be soon, that might prompt you to sell your gold investment. This could be especially true if you increased your gold allocation relative to other assets due to recent conditions.
Based on short-term price targets offered by 18 analysts, the average price target for Barrick Gold comes to $21.82. The forecasts range from a low of $18.00 to a high of $26.15. The average price target represents an increase of 25.26% from the last closing price of $17.42.
In November, 21 Indigenous residents near the North Mara mine sued Barrick Gold in Canada over human rights violations. In December, the legal fight continued with a lawsuit against a London-based gold market association for certifying Barrick's gold from North Mara as responsibly sourced.
The average price target represents 28.55% Increase from the current price of C$23.84. Barrick Gold Corporation's analyst rating consensus is a Strong Buy. This is based on the ratings of 12 Wall Streets Analysts.
Barrick Gold shares were under pressure after production fell and costs rose in the first quarter of the year, though the Canadian miner said it was on track to hit its targets for the year.
I'd stop investing in gold and silver completely. I don't put money in precious metals at all, because they have a lousy long-term track record. — Dave Ramsey is CEO of Ramsey Solutions.
Throughout history, gold has been seen as a special and valuable commodity. Today, owning gold can act as a hedge against inflation and deflation alike, as well as a good portfolio diversifier. As a global store of value, gold can also provide financial cover during geopolitical and macroeconomic uncertainty.
Buffett avoids real estate investments due to precise pricing, lack of competitive edge, complex management and corporation tax disadvantages. However, he considers investing in real estate during crises or via REITs, offering diversification, liquidity and expert management.
BARRICK GOLD CORPORATION (ABX) pays its next dividend on 17 Jun 2024 and goes ex-dividend date on 31 May 2024. BARRICK GOLD CORPORATION's (ABX) last dividend was $0.10, with franking of 0%, and was paid on 15 Mar 2024.
Barrick Gold (NYSE: GOLD) is owned by 54.62% institutional shareholders, 0.00% Barrick Gold insiders, and 45.38% retail investors. Van Eck Associates Corp is the largest individual Barrick Gold shareholder, owning 77.50M shares representing 4.41% of the company.
What Is Barrick Gold's Debt? The chart below, which you can click on for greater detail, shows that Barrick Gold had US$5.17b in debt in December 2023; about the same as the year before. However, because it has a cash reserve of US$4.15b, its net debt is less, at about US$1.02b.
The average price target represents 33.00% Increase from the current price of C$23.14. Barrick Gold Corporation's analyst rating consensus is a Strong Buy. This is based on the ratings of 13 Wall Streets Analysts.
Throughout history, gold has been seen as a special and valuable commodity. Today, owning gold can act as a hedge against inflation and deflation alike, as well as a good portfolio diversifier. As a global store of value, gold can also provide financial cover during geopolitical and macroeconomic uncertainty.
According to our current GOLD stock forecast, the value of Barrick Gold shares will rise by 2.39% and reach $ 18.19 per share by May 23, 2024. Per our technical indicators, the current sentiment is Bullish while the Fear & Greed Index is showing 39 (Fear).
Due to its reputation for being a safe-haven asset, gold tends to perform well during a recession. For example, when the stock market collapsed in 2007, investment demand for gold spiked and continued to rise, and gold doubled in value between 2007 and 2011.
Introduction: My name is Carlyn Walter, I am a lively, glamorous, healthy, clean, powerful, calm, combative person who loves writing and wants to share my knowledge and understanding with you.
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