Before the Call: Goldcorp Gleams

And now, gold bugs, comes the moment you've all been waiting for: Golden gold-digger Goldcorp (NYSE: GG  ) releases its first report of the new year on Monday.

We'll have time aplenty to dissect the specific numbers next week. But before we begin obsessing over Goldcorp's short-term progress, let's use this weekend to review what investors think about it as a long-term investment. Our tool in this endeavor: Motley Fool CAPS, where we poll more than 100,000 investors for their views on well over 5,600 companies, Goldcorp included. Here's what Fools have to say about the company and its long-term prospects.

Up or down?
More than 1,400 investors have submitted ratings on Goldcorp. Their verdict: Not all that's named "gold" necessarily glitters.

Granted, 93% of CAPS investors polled expect Goldcorp to beat the market. Then again, most Fools tend to take a "if you can't say anything nice ..." approach to rating stocks on CAPS. Because a 7% "unfavorable" sentiment may be more significant than it at first appears, Goldcorp scores just three stars out of five possible on CAPS -- putting it near the back of the gold pack:

Gold Group

CAPS Rating

Yamana Gold (NYSE: AUY  )




Golden Star Resources  (AMEX: GSS  )


Barrick Gold  (NYSE: ABX  )


Agnico-Eagle Mines  (NYSE: AEM  )




AngloGold Ashanti (NYSE: AU  )


Wall Street vs. Main Street
Wall Street sentiment precisely tracks that of Main Street on Goldcorp. Of the 19 analysts who follow Goldcorp (according to Capital IQ), 14 have buy/sell opinions on it, and they run 13-to-1 in favor of the stock -- 93%.

Bull pitch
Now here's a shocker. The top-rated pitch in favor of Goldcorp expresses some serious misgivings about the company. CAPS All-Star investor Sinchiruna wrote this pitch in January:

GoldCorp is one of my least favorite gold miners. They are mis-managed, in my opinion. Even though their purchase of Glamis Gold represents fair value at today's gold prices, it didn't sound too favorable at the time. As a former Glamis shareholder, I would much rather still be holding that stock. GoldCorp is one of several gold behemoths that I am reducing my position in at this stage in the commodities bull market. They may very well continue to see solid returns, but I am switching my focus to the mid-tier and junior miners, which I think will outperform the behemoths in 2008 and beyond.

Bear pitch
Well, gee whiz. If Goldcorp's fans are talking smack about the company, what must its foes be saying? Top-rated bear scottidog lets the numbers speak for themselves:

P/E = 129.6x v.17.7x for S&P 500
Price/Sales = 14.3x v 1.5x
Price/Cash Flow = 42.3x v 11.6
Profit Margin = 12.8% v 7.8%
Return on Equity = 2.1% v 15.6%
Return on Assets = 1.5% v 3.0%
Long Term Growth Rate = 68.3% v 13.0%

And yet, in the two months since scottidog penned that laconic pitch, the numbers have changed considerably. Profits have risen and the P/E has fallen by more than half. About the only bad news, numerically speaking, is that the suspiciously ambitious projected growth rate of "68.3%" has lost  ... about 58 of its percentage points. Meaning that at this point, your real concern should be whether you want to own a company that's projected to grow at less than 10% per year going forward.

Who said that?
To learn more about the wise Fools who penned these words, examine their records (and see whether they know whereof they speak), and explore the plethora of additional financial data we've put together on the company, just click here.

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Rich Smith

I like things that go "boom." Sonic or otherwise, that means I tend to gravitate towards defense and aerospace stocks. But to tell the truth, over the course of a dozen years writing for The Motley Fool, I have covered -- and continue to cover -- everything from retailers to consumer goods stocks, and from tech to banks to insurers as well. Follow me on Twitter or Facebook for the most important developments in defense & aerospace news, and other great stories besides.

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5/24/2016 3:55 PM
GG $16.38 Down -0.98 -5.65%
Goldcorp, Inc. (US… CAPS Rating: ***
ABX $16.93 Down -0.99 -5.50%
Barrick Gold Corp. CAPS Rating: **
AEM $44.13 Down -1.80 -3.92%
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AU $13.55 Down -0.84 -5.81%
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