Considering Buying AngloGold Ashanti Limited (AU)? Read This First

Analysts at Citigroup cut their rating on shares of AngloGold Ashanti Limited (NYSE:AU) from Neutral to Sell in their opinion released on November 06. HSBC Securities analysts bumped their recommendation on AU stock from Hold to Buy in a separate flash note to investors on November 07. Analysts at JP Morgan issued an upgrade from Neutral to Overweight for the stock, in a research note that dated back to October 16.

By watching the trading activity of corporate insiders, it will become easier to get a sense of AngloGold Ashanti Limited (NYSE:AU)’s prospects.

AngloGold Ashanti Limited (AU) is expected to jump by 29.22 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $22.49-month high price target. This represents a whopping 107.28 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $12.02, which represents a return potential of 10.78 percent when compared to the closing price of the stock of $10.85 on Thursday, December 06. The lowest price target for the stock is $6.26 — slightly more than -42.3 percent from AU’s current share price.

The shares are currently floating around the first support level of $10.67. Below this, the next support is placed in the zone of $10.49. Till the time, the AU stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 68 on daily chart, which may remain a cause for concern. If the price breaks below $10.49 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $10.98 mark may result into a pull-back move towards $11.1 level.

AU shares accumulated 0.35 points or 3.33 percent on Thursday to $10.85 with a heavy trade volume of 4.525 million shares. After opening the session at $10.92, the shares went as high as $10.92 and as low as $10.615, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $4.61 billion and now has 424.47 million shares outstanding. AngloGold Ashanti Limited (AU) stock has gained 4.03 percent of market value in 21 trading days.

AU stock has a trailing 3-year beta of -1.06, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $0.04 a share in the trailing twelve months. The stock’s value has surged 6.48 percent year to date (YTD) against a rise of 11.28 percent in 12 month’s time. The company’s shares still trade -9.58 percent away from its 1-year high of $12.00 and 53.36 percent up from 52-week low of $7.07. The average consensus rating on the company is 2, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.

Shares of AngloGold Ashanti Limited (AU) are trading at a P/E ratio of 227.04 times earnings reported for the past 12 months. The industry AU operates in has an average P/E of 15.81. Its P/E ratio went as low as 69.19X and as high as 93.82 over the 5-year span. Further, it is sporting a 1.05 on the Price-to-Sales ratio. Compare this with the industry average P/S of 1. 19.9 percent is the gross profit margin for AngloGold Ashanti Limited and operating margin sits at 6 percent. Along with this, the net profit margin is 0.4 percent.