Is Barrick Gold a Good Buy Today - $GOLD Stock Analysis - Barrick Stock Analysis | Summary and Q&A

TL;DR

Berkshire Hathaway's investment in Barrick Gold raises questions about its potential value and if it is a good buy, considering its gold mining business and global operations.

Key Insights

• 🤨 Berkshire Hathaway's investment in Barrick Gold raises questions about the company's potential value and profitability.
• 🫥 Rising gold prices could benefit Barrick Gold's profits, but increasing operational costs may impact its bottom line.
• 🙈 Gold is often seen as a hedge against market uncertainty and inflation, which could contribute to a favorable environment for Barrick Gold.
• 🙃 The fair value of Barrick Gold stock is estimated to be higher than its current market price, indicating potential for upside.
• 🤨 However, the lack of a distinct competitive advantage raises concerns about the company's long-term sustainability and profitability.
• 🏅 Investing in Barrick Gold involves risks associated with gold price fluctuations and the company's reliance on selling its products at market prices.
• 🏅 Analyst estimates for future profitability are based on assumptions about future gold prices, which adds an element of uncertainty to the investment.

Transcript

hi i'm jimmy in this video we're looking at barrick gold ticker symbol g-o-l-d now barrett gold is interesting because as many of us know recently berkshire hathaway took a big stake in the company i think they're the 11th largest shareholder now which is clearly a reason for us to wonder why did they do it and is it worth buying today so we're goi... Read More

Questions & Answers

Q: Why did Berkshire Hathaway invest in Barrick Gold?

While it is unclear if Warren Buffett himself made the investment, it is possible that the company's money managers saw operational opportunities or believed in the potential profitability of the company.

Q: What factors contribute to the profitability of a mining company like Barrick Gold?

While the price of gold is a significant factor, operational costs and productivity also play a role in determining a mining company's profitability.

Q: What is a reasonable fair value for Barrick Gold stock?

Based on a discounted free cash flow calculation using analyst estimates, the fair value of Barrick Gold stock is estimated to be around $37 per share.

Q: Is it worth adding Barrick Gold to a portfolio?

The current stock price of Barrick Gold around $30 per share suggests potential upside. However, considering the risks associated with gold price fluctuations and the lack of a clear competitive advantage for the company, some may prefer a larger margin of safety before investing.

Summary & Key Takeaways

• Barrick Gold is primarily a gold mining company, with gold mines accounting for about 96% of its total revenue in 2019.

• The price of gold has been consistently increasing, which could lead to higher profits for Barrick Gold.

• However, the company's costs to extract gold have also been trending higher, potentially impacting its profits.