The Dow Chemical Company (DOW), Allergan, Inc. (AGN), Barrick Gold Corporation (USA) (ABX): Three Stocks To Short

Trading at a 10 year low with more room to fall

Barrick Gold Corporation (USA) (NYSE:ABX) is trading at a 10 year low based on declining gold prices, mounting costs and delays at its Pascua-Lama project in South America, not to mention losses at its copper business in Africa. As a result, the company announced that 30% of its corporate staff at their Toronto head office will be let go.

The company also said that their capital spending for this year will be reduced by around half a billion based on a reduced exploration spending. Mining stocks as a whole has been hit hard in the recent weeks based on declining commodity prices for precious metals (especially gold) with no bottom price in site. Spot gold has been trading at multi-year lows that have not been seen since 2011. Gold prices are likely to continue to trade under pressure with the recent strength in the U.S dollar and Treasuries yields stronger.

Final words

Companies such as the ones mentioned are not fundamentally poor, they are just in an unfortunate position that is simply out of their control. As long as the external factors (weather, economy, commodity prices) remain unfavorable, the company’s outlook and stock price will also be unfavorable. When conditions change, investors can consider changing positions and buying shares instead of shorting. I am not optimistic that conditions can turn around any time soon, but as it goes with any short position constant monitoring of the companies and sector is required.

The article Three Stocks To Short originally appeared on Fool.com and is written by Jayson Derrick.

Jayson Derrick has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Jayson is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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