It's been a miserable week to own Newmont Corporation (NEM 3.44%) stock.
Shares of the gold miner (which also mines copper, silver, zinc, and lead) are down 5.5% through 10:55 a.m. ET Thursday. This is only Newmont's second straight day of declines, but the stock's price trend is clearly of the "down" variety. Newmont's stock has fallen 16.5% since hitting its all-time high near $132 a share on Jan. 28.
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Gold and silver prices fall
What's ailing Newmont stock? It's hardly a mystery. After hitting an all-time high of $5,419.80 per ounce on Jan. 28, the price of gold plummeted below $4,660 through Monday this week, according to data from TradingEconomics.com. Prices have recovered somewhat since, and stand at 4,816.10 currently.
The story on silver is similar -- but worse. Here, too, prices peaked on Jan. 28 -- at $116.58 per ounce. By Monday, silver was selling for just $79.21. After a brief bounce higher, though, silver prices have resumed falling, hitting $74.89 today.
It makes perfect sense that when the products Newmont mines and sells get cheaper, so too would Newmont's stock price.
NYSE: NEM
Key Data Points
Is Newmont stock a sell?
And yet, none of this is news to Wall Street. Gold and silver prices are widely available, and Newmont's mining costs for shiny rocks are also well known. That makes it pretty easy for Wall Street analysts to do the math and forecast how much Newmont is likely to earn.
And what do analysts think?
Simply this: Newmont stock costs 18 times trailing earnings today. It costs only 16 times the earnings it's probably going to earn this year, though, and earnings are expected to grow 38% next year, giving Newmont stock a PEG ratio of 0.5.
Newmont stock sure looks like a buy to me.
