We acquired the stock of gold producer Randgold Resources Limited on the 16th June 2008 for an average price of $37.65 per share, it closed on Friday at $51.09, on the NASDAQ for a gain of 35.69% in less then a month.
Today we thought that we would take a look at Randgold as it appears on the London Stock Exchange (LSE), as we tend to concentrate our attention on the action on the New York and Toronto Stock Exchanges.
As we can see from the chart at the top of the page the volume of shares traded has increased significantly in the first half of 2008 when compared with second half of 2007, which is a healthy sign. We are also pleased to see that investors on the LSE have recognised the value that Randgold Resources Limited represents. If Randgold were a junior exploration company this sort of sprint would be highly acclaimed. However Randgold has a market capitalisation of $3.89 billion, which as a heavyweight renders this progress as truly remarkable.
We are extremely pleased with our purchase but taking a peek at the chart below we would not be buyers today. As the chart depicts the technical indicators suggest that Randgold is overbought. Having moved so fast over such a short time period we suspect that Randgold will take a breather and also be subject to some profit taking.
However any purchases made on dips this summer should return handsome profits come the end of the year rally which should be in top gear!
Finally a word from Mark Bristow, Chief Executive of Randgold Resources who told the Society of Economic Geologists' conference recently:
"While Africa is rich in mineral wealth it is poor in every other way, and this poverty is the main obstacle to the development of its resources and the stimulation of economic growth. The metals price boom provides the continent with the means to kick-start its economies, much as South Africa used its gold to build a broad economic base years ago. Conditions for prosperity have never been better. But this opportunity can also be squandered if the temptation to cash in immediately triumphs over a long-term commitment to development,"
Have a good one.
Randgold Resources Limited trades on the London Stock Exchange under the symbol of RRS and on the NASDAQ under the symbol of GOLD.
If you are new to investment in the precious metals sector then you may wish to subscribe to our FREE newsletters regarding gold stocks, silver stocks and uranium stocks, please click on the links.