Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why Kinross Gold Corporation Might be Ready to Rebound

By Brian D. Pacampara, CFA - Mar 28, 2014 at 2:35PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Does this analyst make a good case? Or is it just more noise from Wall Street?

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Kinross Gold ( KGC -0.17% ) rallied 3% today after Goldman Sachs upgraded the gold miners from sell to neutral.

So what: Along with the upgrade, analyst Andrew Quail planted a price target of C$4.20 on the stock, representing about 6% worth of downside to yesterday's close. So while momentum traders might be turned off by Kinross' sharp price decline in recent weeks, Quail's upgrade could reflect a growing sense on Wall Street that the company's prospects are becoming too cheap to pass up.

Now what: According to Goldman, Kinross' risk/reward trade-off is steadily improving relative to other gold plays. "We upgrade our rating on Kinross to Neutral (from Sell) following the stock's recent share price decline," said Quail. "Our Neutral rating also reflects that we see greater downside potential elsewhere in our sector coverage." So while Kinross remains just too speculative for average investors, its beaten down stock price might be something for risk-tolerant contrarians to consider. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Kinross Gold Corporation Stock Quote
Kinross Gold Corporation
KGC
$5.94 (-0.17%) $0.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
656%
 
S&P 500 Returns
144%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/01/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.