Monday, June 21, 2010

Heyward fiddles while the Gulf burns

I made a promise to myself that I would not write any more articles about BP but they just keep on digging themselves deeper into a hole of stupidity. My local paper had 3 headline photos this weekend. The first showing Tony Hayward of BP infamy yachting, the second comparing the environmental impact of the oil spill to the Dust Bowl Disaster and the third of the massive fires in the Gulf to burn off the oil. Flip in one page and there is another picture of the hourly workers in jump suits with hand tools cleaning the beaches.

Immediately, into my mind popped the comparison of how Nero fiddled while Rome was in flames. The next image was of Marie Antoinette being told " The people have no bread" and her reply of "Then let them eat cake!" Sounds very much like " The little people are losing their income" and Tony's reply of "Well I'd like my life back too." I guess maybe the French were smarter than we are, we all remember how they got even with her.

Now today instead of taking care of business in the Gulf and getting this 21 inch pipe plugged he has decided to go to Russia and suck up to them before they shut down BP's operations there.

Bernie Madoff only caused his investors to lose $18 billion but since the April 19th close of 59.48 the stock has tumbled to 30.83; a loss of almost $89 billion to BP investors, many of whom are retirees and pension funds dependent on the dividend for income.

What do I want from BP? How about just trying to make me believe they care. How about a photo of all the Executive Officers and the Board of Directors in jump suits with rakes and shovels cleaning the beaches?

Better yet how about a finding that BP's actions are no longer Gross Negligence but have risen to a finding of Criminal Negligence.

Who is benefiting? The short sellers and hedge funds are making a killing. The day the well is plugged those that jump in will make another quick fortune. Too bad they won't share with the innocent stockholders who put their belief in a stable dividend to pay bills in their golden years or the innocent fisherman, waitresses and maids who depended on the beauty of the Gulf to make a living.

Hey Tony why don't you tell them to eat cake!

Jim Van Meerten is an investor who writes on financial matters on Financial Tides,Barchart Portfolio Blogs, Seeking Alpha, Marketocracy and MSN Top Stocks. Please leave a comment below or email

Disclosure: No positions in BP at the time of publication

Riding on the Gold train

Newmont Mining Corp. (NEM ) is engaged in the production of gold and copper, the exploration for gold and the acquisition and development of gold and copper properties worldwide. The company produces gold from mines in Nevada and California, and, outside of the United States, from operations in Peru, Indonesia, Mexico and Uzbekistan. New mines coming online in the next few years in Peru and Ghana should add to sales in the coming years.

Presently production levels this year are expected to be 5.5 million ounces of gold and 380 million pounds of copper.

The stock had a recent price appreciation of 9.45% last month and hit 5 new highs in the last 5 trading sessions. Barchart is giving buy signals on all 13 of its technical indicators. The stock trades around 59.68 with a 50 day moving average of 54.67.

Investor sentiment is high on Motley Fool with the CAPS members voting that the stock will beat the market by a vote of 899 to 84 and the more experienced All Stars are in agreement 311 to 22. Of the columnists Fool follows, articles have been positive 13 to 2.

Wall Street analysts are also high on this stock with 10 buy and 10 hold recommendations published. They feel sales will increase 20.50% this year and 3.50% next year with earnings increases forcasted to be an increase of 25.80% this year, 10.80% next year and continue at a 5 year compounded EPS growth rate of 20.15%.

Normally mining stocks are triple plays where you can have 3 ways to make money: 1- price appreciation of the underlying commodity, 2 - earnings from the mining operations and 3 - nice dividends.

In the case of NEM this years earnings are expected to be about $4.85 per share & cash flow expected to be $3.50 per share. That means the cash dividend of $.40 looks pretty secure now and for several years in the future but at today's share price of 59.68 the dividend gives you only a .67% yield so income investors should look elsewhere for income.

Why should you buy?
  • Price appreciation of the underlying gold and copper reserves
  • Profits from the mining operations
  • 100% Barchart technical buy signal
  • Very high investor sentiment
  • Wall Street buy recommendations based on increases of sales and earnings.

Before you buy this stock please look at an article I've written previously entitled "Should You Own Gold or the Gold Producer?"

Jim Van Meerten is an investor who writes on financial matters on Financial Tides,Barchart Portfolio Blogs, Seeking Alpha, Marketocracy and MSN Top Stocks. Please leave a comment below or email

Disclosure: No positions in the stocks mentioned at the time of publication