Goldcorp Inc. (USA) (NYSE:GG) after falling for the past few days, seems to on a turnaround. The price of gold has been fluctuating immensely and at the moments seems to be moving up. Goldcorp would be the best bet for traders seeking to make use of this opportunity. The price of gold has shot up to cross the $1,200 mark, in the last two weeks. Investors are taking this as a sign that things might be turning around.
Other valuable commodities, like oil and property, have been declining due to political situations around the world. Even foreign exchange rates have become highly unstable and are looking as if they are destined to decline. Gold serves as a safe haven for people who want to preserve their wealth in such an environment.
Goldcorp had reported production of 2.87 million ounces of gold last year, with production expected to reach 3.6 million ounces this year. The numbers sure make it seem like Goldcorp will be able to make the most of current situations. Additionally, Goldcorp has also been exercising excessive cost control, following the fall in gold prices. The company has predicted $1.2-1.4 billion in expenditures, compared to $2.2 billion in the preceding year.
Despite the fact that Goldcorp has only recently started exercising cost control, it still had a strong balance sheet at the end of FY2014. The FY2014, reported $482 million in cash, $1.16 billion in undrawn facilities. However, if the gold prices continue their movement upwards, the shareholders can expect to see a dividend increase this year, from $0.6.
Additionally, Goldcorp has also entered into an agreement with Premier Gold Mines Ltd. The agreement asks for 40% interest from Goldcorp in South Arturo mine in Nevada, to be handed over to Premier Gold Mines. In return, Premier Gold will pay $20 million for the acquisition. The deal is to be finalized by the end of May. The gold prices at the time would tell if it would be a yay or nay.
Goldcorp Inc. (USA) (NYSE:GG) closed at $18.83 after losing 6.6% on April 30. The company has 828.15 million shares in the market, with a 52-week range of $17.01-$29.65.
