It's been a great morning session for Newmont investors, who saw their shares rise 3.8% to a price of $48.99 per share. At these higher prices, is the company still fairly valued? If you are thinking about investing, make sure to check the company's fundamentals before making a decision.
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 40.2 and a P/B ratio of 1.8.
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 -21.9% over the last year compared to -19.9% for the S&P 500 — a difference of -2.0%. Newmont has a 52 week high of $86.37 and a 52 week low of $37.45.
