Dallas, Texas 10/08/2013 (Financialstrend) – On October 1, the rating agency Fitch provided the Gold mining companies with market analysis which left the entire sector business sentiments dampened. It expects gold mining companies to arrive at more sustainable dividend payout plans after factoring in gold prices which might be trading at below $1,200 per ounce of gold for a extended period of time than previously estimated.
The rating firm has gone on to draw up a scenario where Gold operators will have to work at international gold rates which will fluctuate around the $1,000 per ounce mark. This price levels are expected to ring in a extended period of cost cutting and belt tightening efforts on part of the gold miners.
The report cites recent dividend payout plan changes effected by gold miners like Kinross Gold and Barrick Gold which had significantly reduced their dividend payout yields. Readers should note that another mining peer of New Gold, Gold Fields had gone ahead and suspended the interim dividend plan for the foreseeable future.
It is in this depressing Gold trading sentiments that one should evaluate the falling of value in the shares of New Gold Inc. (USA) (NYSEMKT:NGD). The stock which has a market cap of $2.82 billion is trading at $5.91 per share as of close of business on October 7. While the stock had rallied to end the day 0.5% ahead of its previous day close, it continues to be a underperforming stock.
It has ceded closed to 51% of its market value over the past 12 months. It is sown 11% in the past 30 days. The firm has not declared a dividend in the past 12 months trailing period and the investors in the stock are dependent on a strong bounce back in the market value of the stock to book any profits from their investment in the stock.