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Momentum Stock Watch: AngloGold Ashanti Limited (AU)

-- Sunday, July 10, 2022, 14:43 --

Company Profile:

AngloGold Ashanti Limited operates as a gold mining company in Africa, the Americas, and Australia. Its flagship property is a 100% owned Geita project located in the Lake Victoria goldfields of the Mwanza region in north-western Tanzania. The company also explores for silver and sulphuric acid. AngloGold Ashanti Limited was incorporated in 1944 and is headquartered in Johannesburg, South Africa.

Recent News:

AU is one of stocks to buy for stubbornly high inflation. It traded at the lowest forward P/E ratio of 7.01. If gold remains firm or break-out on the upside, AU stock is also poised for a meaningful rally. The company reported $268 million in free cash flow for Q1 2022. With an annualized FCF potential in excess of $1.0 billion, the financial flexibility is robust.

As of Q1 2022, the company reported cash and equivalents of $2.5 billion. Further, with a net-debt-to-adjusted-EBITDAX of 0.51, there is ample scope for organic and acquisition driven growth.

 

Fundamental Analysis:

Ninestocks analyzes several different financial aspects:

Price to Book Value – P/BV, a ratio used to compare book value to its current market price, to gauge whether a stock is valued properly.

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Price to Earnings – PE, the ratio for valuing a company that measures its current share price relative to its earnings per share (EPS).

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Discounted cash flow – DCF, a valuation method used to estimate the value of an investment based on its expected future cash flows.

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Return on Assets – ROA, indicates how profitable a company is in relation to its total assets, how efficiently uses assets to generate a profit.

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Return on Equity – ROE, a measure of financial performance calculated by dividing net income by equity. a gauge of profitability and efficiency.

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Debt to Equity – evaluate financial leverage, reflects the ability of equity to cover outstanding debts in the event of a business downturn.

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Conclusion:

AU receives outperform rating in price to bookd value, price to earnings, discounted cash flow and debt to equity. Technical indicators signal the bullish signs, as there is a bullish crossover in the both the MACD and the stochastic oscillator . The RSI stands at 38.7 with positive bias. We rate AngloGold Ashanti Limited (AU) a STRONG BUY.

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