This Week’s Eagle Eye Quantitative 4.0 Asset Spotlight is NEM
Today, we are focusing on building positions in stocks within the gold sector. Let us now concentrate on the fundamental information of this strong stock and understand the logic behind choosing it.
The current global geopolitical tensions, particularly the instability in the Middle East, have led to an increased demand for gold, a traditional safe-haven asset, among global investors. As investors flock to the gold market, we have witnessed a continuous rise in gold prices, reaching new highs.
When gold outperforms the broader market indices, it often acts like the "canary in the coal mine," signaling potential economic or financial instability. Traditionally, gold is considered a hedge against inflation and a safe haven during crises. Thus, the strong performance of gold may indicate investors' concerns about rising inflation, currency devaluation, and geopolitical tensions.
This chart compares gold to the S&P 500 Index over the past 52 weeks.
This chart compares gold to the S&P 500 Index for the year 2024 to date.
Central banks around the world, especially those in developing and emerging countries, have been buying gold in larger quantities than we have traditionally seen. In fact, in 2022 and 2023, they purchased so much gold that it accounted for about one-quarter of the annual global gold purchases.
A significant portion of gold purchases has occurred in Asia, with China leading the way. The People's Bank of China has increased its gold reserves for 17 consecutive months, marking the longest streak of increases in history. Meanwhile, the Reserve Bank of India, as well as central banks in Kazakhstan and Singapore, have also been boosting their gold reserves.
Gold has long been regarded as a reliable means of wealth preservation, especially during economic difficulties. It is a time-tested financial safety net that helps maintain purchasing power even in economic downturns. Unlike modern fiat currencies, which can depreciate due to factors like inflation or government economic decisions, gold's value does not depend on these factors. This makes it an unparalleled choice for a savings method that does not depreciate over time.
Now let's focus on the information about the high-quality stocks we have selected in the gold sector.
The company is primarily a gold producer, with significant operations and assets in the United States, Canada, Mexico, the Dominican Republic, Peru, Suriname, Argentina, Chile, Australia, Papua New Guinea, Ecuador, Fiji, and Ghana. The company also engages in the production of copper, silver, lead, and zinc. As a world-leading gold company, it is committed to creating value and improving lives through sustainable and responsible mining.
Based on the latest financial data, our analysis indicates that this company has shown significant advantages in multiple key financial metrics. Firstly, the company's gross profit margin has reached 48.89%, which indicates a significant improvement in profitability. At the same time, the net profit margin has also reached 19.38%, demonstrating a substantial increase in operational efficiency.
Additionally, the return on total assets is 6.05%, indicating that the company's ability to generate returns on total assets remains stable. More importantly, the return on equity has reached 11.49%, which shows a significant enhancement in the company’s ability to provide returns to shareholders.
In terms of growth potential, the company also performs well, demonstrating its stability in medium to long-term financing capabilities. These excellent financial indicators not only reflect the current financial health of the company but also provide solid data support for our investment decisions.
Overall, the company demonstrates positive trends in profitability, asset return capability, and growth potential, making it a worthwhile investment target to consider.