I understand and respect that different people will necessarily have different views about hedging. For my part, I see no benefit in hedging voluntarily in an environment where (for a range of reasons) the price of gold is likely to continue to rise significantly.
I set out my concerns about NST’s hedging policy in a number of posts on the thread relating to NST’s most recent quarterly results. I will therefore resist the temptation to repeat them here.
There is one additional concern I have about hedging which I don’t think anyone has mentioned here yet. To the extent that NST is hedging voluntarily, as opposed to hedging as a condition of finance, the hedging will obviously result in NST’s profit being materially less than it would have been had it sold all of its production at a higher spot price. However, if we experience a period of hyper-inflation during the term of the hedging program, it is conceivable that NST’s costs of production will exceed the hedging price. In that event, it will not be a case of NST’s profit being reduced, it will be a case of NST incurring a loss on the sales made under the hedging program. It is very disconcerting to me that a company with NST’s financial strength may have put itself voluntarily in that position.
I have more than a truckload of shares in NST which I have accumulated over the last decade. I am obviously keen to see the company prosper, as I am sure we all are. Unfortunately, I think the company has let itself and its shareholders down badly with its hedging policy.
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Last
$13.43 |
Change
-0.280(2.04%) |
Mkt cap ! $15.43B |
Open | High | Low | Value | Volume |
$13.59 | $13.65 | $13.28 | $45.09M | 3.359M |
Buyers (Bids)
No. | Vol. | Price($) |
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4 | 99022 | $13.42 |
Sellers (Offers)
Price($) | Vol. | No. |
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$13.43 | 3405 | 1 |
View Market Depth
No. | Vol. | Price($) |
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1 | 3305 | 13.360 |
1 | 1000 | 13.350 |
1 | 3006 | 13.300 |
1 | 1218 | 13.290 |
1 | 942 | 13.280 |
Price($) | Vol. | No. |
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13.440 | 1000 | 1 |
13.450 | 13350 | 3 |
13.490 | 200 | 1 |
13.520 | 2300 | 1 |
13.550 | 8250 | 1 |
Last trade - 16.10pm 14/06/2024 (20 minute delay) ? |
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Last
$13.39 |
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Change
-0.280 ( 1.81 %) |
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Open | High | Low | Volume | ||
$13.60 | $13.60 | $13.28 | 633377 | ||
Last updated 15.59pm 14/06/2024 ? |
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