To The Moon

In today's edition, we will track the fundamental readings of long-term bullish companies in strong (TigerTrade Top 1 Gainer) concepts each week and look forward to your attention and discussion.

Disclaimer: Capital at risk. This is not direct financial advice or a recommendation to acquire or dispose of any investment, but for communication only.

2 of the 3 indexes closed green last week. The banking sector’s troubles continued despite many efforts to restore confidence in the market. The best performance industries are gold, silver, interactive media & services.

The clear winner in the two major risk events of $SVB Financial Group(SIVB)$ and $Credit Suisse Group AG(CS)$ is undoubtedly gold, with the price of gold once approaching the $2000 level. Since the beginning of this month, the monthly chart of gold has completed an engulfing combination.

Although it was previously thought that the price of gold had a chance to rebound and return to a tug-of-war, the current rise still exceeds expectations. If the current combination is maintained, historically, there has been only one similar situation in 2016, when the price of gold rose for another month before experiencing a significant pullback. Although the price and trend at that time were different from now, considering that the historical high is not far away, it is necessary to pay attention to the downside risk if the bulls continue to work hard to rise in the next 3-4 weeks, but there is no stronger driving force on the news side.

In the longer term, gold has the opportunity to refresh its highs, but the timing and news may be delayed.

Considering the different perceptions of the stock, this time TigerPicks choose $Gold Fields(GFI)$ to have a fundamental highlight to help users understand it better.

$Gold Fields(GFI)$

South Deep Is Handling The Eskom Crisis Effectively

South Africa is in the midst of a power crisis as Eskom's collapse has provided the nation's miners with a stress test. As explained in many of our previous articles, it is unlikely that Eskom will recover, and a gradual decline into the abyss is the most likely scenario.

Despite its load curtailment concerns, Gold Fields' South Deep mine in the Wits Basin has stood strong, delivering robust full-year results in 2022 as production and free cash flow grew by approximately 12% and 32.9%, respectively.

Looking ahead, it is unlikely that Eskom's situation will improve, and the most realistic trajectory for SA mining is self-generation or a divide in municipal-level energy generation. Nonetheless, Gold Fields has shown that it can cope with systemically-induced risks, lending a premise that its SA-Based assets are underappreciated. In addition, Gold Fields has wrapped up its feasibility study of South of Wrench, and indications suggest that production will assume in the latter part of 2023.

Australian Operations Are Growing Linearly

Australia is Gold Fields' cash cow, and we are very excited about the country's mining activities overall.

Gold Fields' Australia segment's production surged by 4% year-over-year, and we believe more is to come as an inflection point has been reached regarding weather delays that set most regional miners back during 2022. The segment's CapEx is anticipated to notch up due to higher maintenance costs in 2023 amid pre-strippings at Gruyere and an equipment cycle upgrade, which includes a new pebble crusher at Gruyere.

All in all, there aren't any indicators suggesting that Gold Fields' Australia unit is set to abate its robust performance in what's left of 2023.

Salares Norte Project Update: Lowering The Cost Base

For those unaware, Salares Norte is a high-grade open-cast gold-silver project based in Chile, which is 100% attributable to Gold Fields. The mine's feasibility study was completed in 2018, conveying a mine life of 10 years and average production of 450 000 ounces for the first seven years.

As previously planned, Gold Fields was ready to commission the mine early this year. However, weather delays and skills sourcing contractor debacles have pegged back production to late 2023.

Despite its delays (which have caused an unwanted draw on Gold Fields' CapEx), the asset is believed to host high-quality oxidized minerals that can be mined at low-cost. All in all, the asset is anticipated to yield financial synergies while extending Gold Fields' footprint in Latin America (as a proxy to Africa).

Salares Norte CapEx Outlay(Gold Fields)

Valuation and Dividends

At a price-to-book ratio of 1.93, many might argue that Gold Fields stock is in fair value territory. However, a closer look suggests that the stock's price-to-book multiple is at a cyclical low, indicating that the asset possesses a value gap.

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Furthermore, Gold Fields provides its investors with carry returns in the form of a cash dividend. In our opinion, the stock's5.36% forward dividend yieldis compelling, and the security's exponential dividend payout growth forecast can be substantiated by its status as a cyclical gold miner.

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Stock Price Forecast:

Here are the target price forecast for the future 12 months from analysts on CNNMoney.com.

The 10 analysts offering 12-month price forecasts for Gold Fields Ltd have a median target of 12.00, with a high estimate of 13.96 and a low estimate of 10.31. The median estimate represents a+3.90%increase from the last price of 11.55.

Hope this analysis helps you get more understanding of the company's whole image, Tiger Picks will follow up the monthly performance as a longterm track.

Resource:

https://seekingalpha.com/article/4585764-gold-fields-likely-wont-be-this-affordable-again

What are your thoughts on $Gold Fields(GFI)$?

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