Newcrest Mining – 2011 a year to forget

NCM_bubble_chart

2011 was an awful year for many stocks and stockmarkets around the world. Despite the global debt problems, many companies, particularly in the resources sector are making very healthy profits, are cashed up and have little or no debt. Newcrest Mining fits this criteria, but ended up falling - 27.8% in 2011, despite gold prices rising by 10.0%. Newcrest, like many other miners had its worst year since the commodity boom started a decade ago.

Increasingly, it now seems that Newcrest, BHP Billiton and other resource stocks are a proxy for world sharemarkets rather than move up or down on their company fundamentals or value of commodities of which they produce.

NCM – Yearly candlestick chart

Newcrest’s market cap at the end of 2011 was $22.7 bn (down from $30.9 bn at end of 2010). Newcrest now accounts for around 47% of total gold company market cap (*excludes copper focused miners such as BHP, OZL, PNA).

The next largest gold stocks are RRL (at $1.5 bn), PRU (at $1.1 bn) and EVN (at $1.05bn).

2011 Market capitalisation bubble chart – ASX listed gold stocks

~ Scott

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