AngloGold Ashanti has had a bad year, with the company’s lack of a permanent chief executive officer and a suspension of its Ghana mine operations weighing on the stock. But with shares now cheap compared with peers, analysts see potential for upside.
Shares of the world’s third-largest gold producer have dropped 30% in the past year, making it the worst-performing stock in the 113-company Bloomberg World Mining Index. It also trails peers on South Africa’s FTSE/JSE Precious Metals and Mining Index, which has gained 20% in the same period.
Investor sentiment began to sour three days after the company’s shares rose to a record on July 27. That’s when AngloGold’s CEO Kelvin Dushnisky shocked stakeholders by announcing his resignation.
The stock on Tuesday fell to the lowest since March 2020, and trades at a forward price-to-earnings ratio of 8.5 times compared with 10.8 for the Bloomberg mining index.
“AngloGold is a good turnaround stock at this point, being one of the cheapest large cap gold stocks globally,” said Bloomberg Intelligence mining analyst Grant Sporre.
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