Last Thursday morning Macquarie published a report on Barrick Gold (ABX) which was so good it even got a positive mention here on these normally cynical and brokerage-skeptic pages known as IKN (right here). As it happens, Macquarie downgraded ABX to underperform and its target price from CAD$22 to CAD$11.
I later received permission to distribute my copy of the report, which I did to subscribers and here’s the cover letter that went with the mailer (sent Friday Jan 9th):
Dear all,I’ve taken plenty of requests for a copy of the Macquarie report on Barrick Gold (ABX) since mentioning it on the blog yesterday. Therefore I’ve decided to blanket you all and send out the report to the whole list, but for more than that single reason. Though IKN gets a small mention, that’s not the reason to read it. The reason is the report’s high quality, considered reasoning and its conclusions drawn. This is the type of fundamental research I’d like to do when I grow up.It’s exactly the type of research I’d like to see from a whole bunch of brokerage analysts who are, in theory at least, capable of similar work but still, even now and after the market performance we’ve seen for the last two or so years, prefer to remain uncontroversial to the point of sycophantic with the companies they cover. We need to see more reports such as this ABX one out there, written by people unafraid to speak truth to power. If only for that, I’m keen on this being read by as many people as possible.Hope you enjoy your Friday.Best, O
And here’s how ABX has traded since the Macquarie report was published, compared to a bunch of peer stocks (GG, NEM, AEM, GFI) as well as the precious metals miners ETf (GDX and gold bullion (GLD):
That, ladies and gentlemen, is looking like a championship call on ABX from Macquarie. Let other brokerages and their anal ysts take due note.