Gold and Centamin PLC

Written by MrStockFox. Posted in Trade Ideas

With gold on the rise we should start to see better margins flowing through to the bottom line of most miners.  My hope is that my largest gold stock position, Centamin PLC, sees those higher margins and will announce a raise to its dividend later this year.  I don't hold this company as a traditional dividend growth stock, but as a hedge to all my other portfolio components.  So I never really expected it to ever raise its dividend, but last year even with the price of gold declining, Centamin raised its dividend 64%.

Over the years I have mentioned this company multiple times, here, here, here.  In my last post dated Aug 17th 2015 I mentioned how I expected the ascending triangle formation on the chart to breakout to the upside.  If that was to happen I felt we would see a multi-year bull market surge on the price of the stock.  That is exactly what happened but it took some patience for that triangle break.  It finally broke in Jan of this year at around $1.40 in price.  Today we closed at $2.78, up almost 100% over the last 6 months.   I fully expect that the price should hit the highs at around $3.25.  At that level I we should consolidate for many many months.  If gold continues higher in the coming years then I would fully expect a breakout to new all time highs.  For now I continue to hold my position.

Disclosure: I own over 20,000 shares in Centamin PLC have owned the company for over 3 years.