Earnings season has seemingly taken a backseat to the recent stock market sell-off. Nevertheless, mining firms Barrick Gold Corp (NYSE:ABX), Goldcorp Inc. (NYSE:GG), and Kinross Gold Corporation (NYSE:KGC) could be worth watching this week, with all three slated to report earnings after tomorrow's close -- and the trio of gold stocks each staring at stiff monthly losses.
Barrick Gold stock is down 8.3% so far in February -- including today's 1% drop to trade at $13.13 -- on track for its worst monthly performance since October. This is just more of the same for the shares, which have surrendered more than 36% since hitting an annual high of $20.76 almost one year ago, and tagged a nearly two-year low of $12.60 last Friday.
The stock's most recent earnings reaction echoes these technical troubles, with ABX shares slumping 7.9% in the session subsequent to its October results. On average, the stock has moved 4.5% the day after earnings are released, regardless of direction. This time around, the options market is pricing in a bigger 7.3% swing, according to Trade-Alert.
Another poorly received earnings report could encourage more short sellers to target the stock -- which would likely create bigger headwinds. Short interest on ABX ramped up 22.5% in the most recent reporting period to 9.2 million shares. However, these bearish bets account for less than 1% of the equity's available float.
Goldcorp rallied more than 33% from mid-December through mid-January, eventually losing steam alongside the broader equities market. GG stock was last seen trading down 2.4% at $12.52, and pacing for an 11.8% February loss -- its worst since November 2016.
Looking back over the past eight quarters, GG shares have closed lower the day after earnings five times, averaging a loss of 5.9%. For Thursday's trading, the options market is expecting a 7.8% move in either direction.
Options traders, it seems, are bracing for another post-earnings dip. The February 13 put is home to peak open interest of 31,262 contracts in the front-month series, and data from Trade-Alert points to significant buy-to-open activity in early January, when Goldcorp shares were trading near $13.40.
After notching a four-month high of $4.78 in late January, Kinross Gold stock pulled back to the $3.80 region -- an area that has served as a floor for the shares since July. While KGC bounced from here, the equity is still down 9.1% month-to-date. This would mark its worst monthly performance since this time last year.
Historically, KGC stock has had a positive reaction to earnings -- closing higher in the session after the results were released in six of the last eight quarters. On average, the shares have moved 5.8% the next day in either direction, with the options market pricing in a heftier 8.5% swing this time.
Short-term options traders are more call-skewed ahead of the event, per Kinross Gold's Schaeffer's put/call open interest ratio (SOIR) of 0.60. Peak front-month open interest is docked at the February 4.50 call, where data from the major options exchanges points to a mix of buy- and sell-to-open activity.