Yesterday before the market open I made note of the fact that AEM just boosted its dividend by 40% following a blockbuster earnings announcement. The shares of Agnico Eagle Mines (NYSE: AEM) gapped up on the news and went up for the rest of the day as you can see from this chart.
At the same time gold got a bid to close above $1500 an ounce for the first time in several weeks and the GDX gold stock ETF managed to close above its downtrend resistance trendline too.
It looks like GDX is going to test its October high now and may even head up to $29 before next week’s Fed meeting.
Now Yamana Gold (NYSE: AUY) just came out and said that they are going to increase their dividend too by 100%!
So yes, this means that AUY isn’t just increasing its dividend by 40%, but by 100%!
Yamana announced earnings of 5 cents a share from $99 million in revenue when analysts were predicting it would hit 2 cents a share. Take a look at the chart.
It will be interesting to see if AUY can move like AEM did yesterday.
I own AUY and AEM in my main account and have GDX in my IRA.
Meanwhile Bitcoin fell yet again yesterday. As I said a few weeks ago in September as Bitcoin rolled over if you are in these “coins” it is time to sell them and walk away from them forever and buy real stocks that pay real dividends. Stocks represent ownership in companies so when they raise dividends you benefit from that as a shareholder. When you own a “coin” you own NOTHING, because “coins” are not shares that represent ownership in anything. They are just “virtual currencies” printed out of thin air.
Stocks that boost dividends are what to invest in – especially when they are in a sector that broke out of a major four year resistance top a few months ago and pulled back for an entry point.
That doesn’t mean all stocks are good or that you should buy stocks just because they have good news. In fact buying stocks on earnings doesn’t work well if the stock is trading below its 200-day moving average tend to be trap plays. But most mining stocks are well above their 200-day moving averages and their earnings are being boosted by the fact that gold and silver prices are much higher now than they were at the start of the year.
-Mike
