Why OceanaGold Shares Surged

Is this meaningful? Or just another movement?

| More on:
The Motley Fool

Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on big changes — just in case they’re material to our investing thesis.

What: Shares of gold explorer OceanaGold (TSX: OGC) popped 13% today after its quarterly results and outlook topped Bay Street expectations.

So what: The stock has plunged over the past year on falling gold prices, but today’s Q3 results — profit of $43.7 million vs. a loss of $70.5 million in Q2 — coupled with upbeat production guidance suggests that the worst is behind it. Management cited higher gold and copper sales from its new Didipio mine in the Philippines, higher grade ore at its New Zealand mine, and lower costs across the company for the strong report, giving analysts plenty of tailwinds to bank on.

Now what: Management now expects to produce 18,000-20,000 tons of copper in 2013, up from its prior view of 15,000-18,000 tons, and sees gold production of 285,000-325,000 ounces. “Didipio continues to perform well with increasing gold production and strong copper production,” said CEO Mick Wilkes. “We are pleased to increase our full year 2013 copper production guidance while decreasing our cash cost guidance and remain committed to strengthening the balance sheet through the repayment of debt.” So while average investors should think twice about speculating on gold prices, Oceana’s forward P/E of 10, coupled with its upbeat outlook, might make for a relatively safe way to do it.

Buy These 5 Companies Instead of Following a Flawed Piece of Advice

Many Americans have turned to “indexing” when managing their portfolios. But even though it works for our neighbors to the south, Canadians may walk into a trap by relying on indexes. You see, unlike the TSX, American indexes are effectively diversified … making them safer bets.

So what does this mean for savvy Canadian investors? The Motley Fool has prepared a Special FREE Report that can help you work around the pressure to invest in indexes. It’s called “5 Companies That Will Help With a Flawed Piece of Advice,” and you can receive a copy at no charge by simply clicking here now!

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.

Follow us on Twitter and Facebook for the latest in Foolish investing.

Fool contributor Brian Pacampara does not own shares of any companies mentioned.  The Motley Fool has no positions in the stocks mentioned above at this time.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

More on Investing

Retirees sip their morning coffee outside.
Retirement

5 Red Flags the CRA Looks for in Retirement Tax Returns

Here are five red flags that might catch the CRA's attention and that retirees should avoid.

Read more »

The sun sets behind a power source
Dividend Stocks

I’d Put $10,000 Into This TSX Utility Stock Before the Next Rate Announcement

Utility stocks are some of the safest options out there!

Read more »

Investor wonders if it's safe to buy stocks now
Bank Stocks

National Bank of Canada: Buy, Sell, or Hold in July 2025?

This big bank stock is a sound option for income investors in July for its positive momentum and strong showing…

Read more »

Female raising hands enjoying vacation, standing on background of blue cloudless sky.
Dividend Stocks

This Stock Makes Me Sleep Like a Baby Every Night

Shares of Fortis (TSX:FTS) could help income investors get a great night's sleep even as the market feels toppier.

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Wednesday, July 9

TSX volatility may persist today as investors weigh tariff-driven copper gains against falling precious metals and Fed policy cues.

Read more »

View of high rise corporate buildings in the financial district of Toronto, Canada
Dividend Stocks

I’d Invest $5,000 in This 7.5% Monthly Dividend Stock Before the Market Catches On

Need some extra cash coming in? Then this dividend stock is the first place investors will want to look.

Read more »

senior man smiles next to a light-filled window
Dividend Stocks

TFSA Passive Income: 2 High-Yield Canadian Stocks for Retirees

These top TSX stocks have increased their dividends annually for decades.

Read more »

concept of real estate evaluation
Stocks for Beginners

This Top TSX Stock Could Be the Perfect Buy During a Housing Correction

If you want a stock you can buy and hold for decades as housing ramps up, this is the one…

Read more »