Shares in precious metals miner Hochschild Mining (LSE: HOC) have soared by as much as 10% today despite the company releasing no significant news. Of course, such a major rise shouldn’t be a huge surprise to investors, since Hochschild has recorded stunning gains since the turn of the year. Its shares are up by 383% year-to-date and this has largely been because of a rapid rise in the price of gold.
Gold’s upturn in 2016 has meant that Hochschild is enjoying a purple patch. Its bottom line is expected to rise by 152% next year and this puts it on a price-to-earnings growth (PEG) ratio of only 0.1. This indicates that even if the price of gold stabilises somewhat and even comes under a degree of pressure, Hochschild’s shares could still perform well owing to their wide margin of safety.
Looking ahead, the price of gold is unlikely to fall in the coming months. US interest rate rises are likely to be slow and steady due to fears surrounding the global economy and with investors likely to remain nervous following the EU referendum and ahead of the US election, gold may prove popular and be in demand as a store of wealth.
Also rising today are shares in Monitise (LSE: MONI). The mobile payments solution specialist is up by over 10%, but as with Hochschild, it has released no significant news today. Today’s rise takes Monitise back into positive territory for 2016 as the company continues to offer a rather uncertain outlook for its investors.
For example, Monitise is expected to remain lossmaking in the current year and next year. However, its losses are set to narrow considerably, with a pre-tax loss of £33m forecast for this year, falling to £15m next year. This could improve investor sentiment in the stock as it shows that Monitise’s financial performance is moving in the right direction.
However, the reality is that Monitise has had huge potential for quite some time and despite an excellent product and major client wins, it has been unable to produce a black bottom line. Therefore, prudent investors may wish to await evidence of profitability before parting with their hard-earned cash.
Meanwhile, Sound Energy (LSE: SOU) has risen by 14% today after it released a positive update regarding its Tendrara licence area, which is located onshore in Morocco.
Encouragingly, rigless operations are continuing and the results are already above company expectations as a significant stable flow has already been achieved. That’s despite so far having accessed only 18% of the total reservoir and no stimulation having yet been performed. Sound Energy will now complete the remainder of the rigless operation, after which the results will be announced.
This is clearly very exciting news for the company and it seems relatively likely that investor sentiment will continue to improve over the near term. Clearly, Sound Energy is highly dependent on news flow being positive, but for less risk-averse investors it could be worth a closer look.