Centamin Share Price Forecast December 2021 – Time To Buy CEY?

Shares of the UK-based gold mining company Centamin PLC (LSE: CEY) are in the red today, after closing at 91.44p on December 3rd (17:53 GMT). CEY shares are now trading at 91.44p, but shareholders must consider how the economic instability induced by Covid-19 may influence the share’s price. Most investors are eager to acquire what they perceive to be low-cost shares in unpredictable circumstances; in such a scenario it’s critical to distinguish between a solid bargain and a value trap.

Centamin – Technical Analysis

As per the financial statement from the Centamin, the market capitalisation of the company is at £105.529B with total assets worth £102.761 billion. Total revenue for 2020 was £64.63 billion, compared to £51.13 billion a year ago.

Technical indicators like moving averages for CEY including Exponential Moving Average (10)(95.05), Simple Moving Average (10)(94.64), Exponential Moving Average (20)(96.33), Simple Moving Average (20)(98.31) are pointing towards a selling action. Oscillators, on the other hand, such as Relative Strength Index (14)(38.94), Stochastic %K (14, 3, 3)(7.44), Commodity Channel Index (20)(−103.41), Average Directional Index (14)(16.84) are neutral.

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Recent Developments

Centamin PLC is a company that specialises in valuable metals discovery, commercialization, and extraction. Egypt, Burkina Faso, Cote d’Ivoire, and Corporate are the company’s core business areas.

The dividend yield on Centamin shares is more than 5%. This is significantly higher than the existing inflation rate and even higher than the predicted average annual inflation rate of 1.5 per cent this year. The key market strength of the gold miner with an emphasis on Egypt is its low production expenses. Furthermore, the company has a robust financial sheet with plenty of resources. The company’s strong dividend yield, which is expected to reach 6.6 per cent, next year, is supported by these traits. Centamin is now trading at a forward price-to-earnings (P/E) ratio of 11.4, in addition to its other appealing benefits. This multiple, once again, adds to the share’s appeal undoubtedly.

For most of the previous 5 years, its dividend yield has been considerably higher than the present inflation rate of 3%. In other terms, it wasn’t merely a transient jump in gold prices last year that boosted Centamin’s revenues and, as a result, its dividends. Investors have received high dividend yields from the corporation on a continuous basis. So, even though inflation stays significant, the business’s yield is roughly 3.5 per cent higher, implying that if one bought the shares, they would still make a profit in real terms.

Should You Buy Centamin Shares?

The Earnings Yield measures the difference between a company’s profit and its market value. It calculates the share’s overall worth, which enables comparing multiple shares much easier. The greater the Earnings Yield is expressed as a percentage, the better the share’s value. Centamin’s Earnings Yield is at 18.2 per cent, which is a strong guideline of reference for a decent Earnings Yield.

However, the most significant risk associated with purchasing any commodity-based business is that associated prices may decline. In this situation, if the gold price falls, Centamin’s profits may suffer. Also, investing in gold mining equities or exchange-traded funds (ETFs) exposes shareholders to the business of mining for the metals. This may be a concern for profitability since manufacturing difficulties can eat into sales and drive up costs.

However, Centamin is hoping to produce up to 500,000 ounces of gold each year. It is thus safe to believe that the company will prove to be the profitable UK share to invest in in the coming years and beyond. In today’s market, it would be a smart move to purchase the shares for one’s penny share portfolio.

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