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

up arrow on wooden blocks
Stocks for Beginners

3 High-Growth Canadian Stocks for Investors to Buy Now

These high-growth Canadian stocks have demonstrated resilience and robust performance, even amid market fluctuations.

Read more »

Woman in private jet airplane
Investing

Air Canada Stock Jumped 63% in 3 Months: Here’s How High It Could Fly in 2025

Air Canada (TSX:AC) stock has been a high-flyer, but don't count the name out in the new year as air…

Read more »

Man data analyze
Bank Stocks

Should You Buy TD Stock While it’s Below $75?

TD Bank just plunged on its fiscal Q4 2024 earnings news. Is TD stock now oversold?

Read more »

money goes up and down in balance
Dividend Stocks

Invest $10,000 in This Dividend Stock for $784 in Passive Income

A top-notch dividend stock can add security and stability for any investor, and this energy option is one of the…

Read more »

a man relaxes with his feet on a pile of books
Stocks for Beginners

The Smartest Growth Stocks to Buy With $2,000 Right Now

Got $2,000 of cash to invest? There are always opportunities in the market. Here are three high quality businesses to…

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Investing

TFSA Investors: Where to Invest $7,000 Before the Year Ends

These TSX stocks offer promising growth potential, driven by their presence in rapidly expanding industries and market segments.

Read more »

people relax on mountain ledge
Dividend Stocks

Here’s the Average Canadian TFSA and RRSP at Age 40

If you're an investor needing extra passive income to bridge the gap for retirement, you're not alone. And this stock…

Read more »

ways to boost income
Dividend Stocks

CRA Alert: Tax Brackets to Increase by 2.7% in 2025

Holding the iShares S&P/TSX Capped Composite Index Fund (TSX:XIC) in a TFSA is a great way to avoid entering a…

Read more »