Investors Buy High Volume of Call Options on Newmont (NYSE:NEM)

Key Points

• Unusual options activity: Traders bought 42,737 Newmont call options on Wednesday, about 63% above the stock’s typical daily call volume, signaling elevated speculative interest.
• Shares fell sharply: Newmont stock dropped 5.9% to $92.76, even as trading volume came in above average and the company maintained a strong balance sheet with low debt.
• Analysts remain constructive: Despite some mixed ratings, Wall Street’s consensus on Newmont is still a Moderate Buy, with an average price target of $142.26; the company also pays a quarterly dividend of $0.26 per share.

Newmont Corporation (NYSE:NEM - Get Free Report) saw some unusual options trading activity on Wednesday. Stock traders bought 42,737 call options on the company. This represents an increase of 63% compared to the typical volume of 26,197 call options.

Insider Buying and Selling

In other news, CEO Natascha Viljoen sold 3,882 shares of the firm's stock in a transaction that occurred on Monday, June 1st. The shares were sold at an average price of $105.32, for a total value of $408,852.24. Following the completion of the transaction, the chief executive officer directly owned 142,999 shares in the company, valued at approximately $15,060,654.68. This trade represents a 2.64% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Peter Wexler sold 13,378 shares of the firm's stock in a transaction that occurred on Friday, May 1st. The shares were sold at an average price of $110.11, for a total transaction of $1,473,051.58. Following the completion of the transaction, the executive vice president owned 67,865 shares of the company's stock, valued at $7,472,615.15. This trade represents a 16.47% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold 49,950 shares of company stock valued at $5,494,288 in the last three months. Insiders own 0.06% of the company's stock.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Cedar Mountain Advisors LLC bought a new position in Newmont during the 1st quarter valued at approximately $25,000. Pinnacle Bancorp Inc. bought a new position in Newmont during the 1st quarter valued at approximately $25,000. GoalVest Advisory LLC bought a new position in Newmont during the 4th quarter valued at approximately $25,000. Swiss RE Ltd. bought a new stake in shares of Newmont during the fourth quarter valued at approximately $26,000. Finally, Cornerstone Planning Group LLC increased its position in shares of Newmont by 312.1% during the fourth quarter. Cornerstone Planning Group LLC now owns 272 shares of the basic materials company's stock valued at $27,000 after acquiring an additional 206 shares in the last quarter. Institutional investors own 68.85% of the company's stock.

Newmont Trading Down 5.9%

Shares of NEM traded down $5.78 during mid-day trading on Wednesday, hitting $92.76. 10,148,117 shares of the company's stock traded hands, compared to its average volume of 9,401,561. Newmont has a 1 year low of $52.42 and a 1 year high of $134.88. The firm has a market capitalization of $99.02 billion, a P/E ratio of 12.03, a PEG ratio of 1.64 and a beta of 0.42. The business's 50-day moving average price is $111.63 and its 200-day moving average price is $109.87. The company has a quick ratio of 2.17, a current ratio of 2.44 and a debt-to-equity ratio of 0.15.

Newmont (NYSE:NEM - Get Free Report) last released its earnings results on Thursday, April 23rd. The basic materials company reported $2.90 EPS for the quarter, beating analysts' consensus estimates of $2.07 by $0.83. The company had revenue of $7.31 billion during the quarter, compared to analysts' expectations of $6.83 billion. Newmont had a return on equity of 27.84% and a net margin of 33.87%.The firm's revenue for the quarter was up 45.8% compared to the same quarter last year. During the same quarter last year, the business posted $1.25 EPS. As a group, sell-side analysts forecast that Newmont will post 9.91 EPS for the current fiscal year.

Newmont Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Monday, June 22nd. Investors of record on Wednesday, May 27th will be given a dividend of $0.26 per share. This represents a $1.04 dividend on an annualized basis and a yield of 1.1%. The ex-dividend date of this dividend is Wednesday, May 27th. Newmont's dividend payout ratio (DPR) is 13.49%.

Wall Street Analysts Forecast Growth

Several research analysts have recently commented on the company. Canaccord Genuity Group boosted their price objective on Newmont from $150.00 to $160.00 and gave the company a "buy" rating in a research report on Wednesday, April 29th. Zacks Research downgraded Newmont from a "strong-buy" rating to a "hold" rating in a research report on Friday, April 3rd. Argus boosted their price target on Newmont from $94.00 to $125.00 and gave the company a "buy" rating in a report on Thursday, April 23rd. BNP Paribas Exane boosted their price target on Newmont from $123.00 to $128.00 and gave the company a "neutral" rating in a report on Monday, March 2nd. Finally, The Goldman Sachs Group reduced their price target on Newmont from $125.10 to $122.50 and set a "buy" rating on the stock in a report on Thursday, June 4th. Two analysts have rated the stock with a Strong Buy rating, seventeen have assigned a Buy rating and five have issued a Hold rating to the company's stock. According to data from MarketBeat, Newmont presently has an average rating of "Moderate Buy" and a consensus price target of $142.26.

About Newmont

Newmont Corporation NYSE: NEM is a leading global gold mining company engaged in the exploration, development, processing and reclamation of gold properties. The company's core business centers on the production of gold, with additional byproduct metals produced from its operations. Newmont operates a portfolio of long‑lived mines and development projects, and its activities span the full mine life cycle from early-stage exploration through to mining, milling and closure.

Founded in 1921 and headquartered in Greenwood Village, Colorado, Newmont has grown through organic development and strategic acquisitions.

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