We've been asking ourselves recently if the market has placed a fair valuation on Newmont. Let's dive into some of the fundamental values of this large-cap Basic Materials company to determine if there might be an opportunity here for value-minded investors.
Newmont Corporation engages in the production and exploration of gold. The company belongs to the Basic Materials sector, which has an average price to earnings (P/E) ratio of 8.57 and an average price to book (P/B) ratio of 1.86. In contrast, Newmont has a trailing 12 month P/E ratio of 45.6 and a P/B ratio of 1.6.
P/B ratios are calculated by dividing the company's market value by its book value. The book value refers to all of the company's tangible assets minus its liabilities -- meaning that intangibles such as intellectual property, brand name, and good will are not taken into account. Traditionally, a P/B ratio of around 1 shows that a company is fairly valued, but owing to consistently higher valuations in the modern era, investors generally compare against sector averages.
Newmont has moved -20.3% over the last year compared to -17.3% for the S&P 500 -- a difference of -2.9%. Newmont has a 52 week high of $86.37 and a 52 week low of $40.
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