How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in Harmony Gold (HMY - Free Report) ten years ago? It may not have been easy to hold on to HMY for all that time, but if you did, how much would your investment be worth today?
Harmony Gold's Business In-Depth
With that in mind, let's take a look at Harmony Gold's main business drivers.
Harmony Gold Mining Company Limited is based in Randfontein, South Africa. The company conducts underground and surface gold mining. It is also engaged in related activities such as exploration, processing, smelting and refining. Harmony is South Africa's biggest gold producer by volume with production of 1.47 million ounces in fiscal 2023.
The company’s mining operations are principally concentrated in South Africa. The company has nine underground operations located in the Witwatersrand Basin. Additionally, Harmony has an open-pit mine on the Kraaipan Greenstone Belt along with several surface sources treatment operations. The Hidden Valley, which is located in Papua New Guinea, is an open-pit silver and gold mine.
Also, many of these mines are located in the Free State Province such as Welcom, Virginia, Tshepong and Bambanani, along with the Evander gold mine in Mpumalanga province, the Elandskraal mine at the West Rand goldfields in Gauteng province, and Kalgold operations in the North West province.
The company has discontinued its mining operations at Mt. Magnet and South Kalgoorlie in Western Australia as a strategic move. Harmony recorded sales of $2,774 million for fiscal 2023 (ended Jun 30, 2023).
Exploration Projects
Domestic Projects: In South Africa, Harmony operates a total of nine underground operations, one open pit operation and several surface operations including an open cast mine, and nine processing plants, which are located in all of the currently known goldfields in the Witwatersrand basin of South Africa as well as the Kraaipan Greenstone Belt.
International Projects: In Papua New Guinea (PNG), Harmony has full ownership of Hidden Valley, an open-cast gold and silver project that began production in June 2009, and 50% ownership of the Wafi-Golpu project. Harmony’s exploration portfolio focuses principally on highly prospective areas in PNG and the Wafi-Golpu project in particular. Harmony expects that if Wafi-Golpu is developed, it will shift the company’s geographical mix from more than 90% South African production to 75% domestic output and 25% offshore. Harmony, in December 2022, also acquired the Eva Copper project and surrounding exploration tenements from Copper Mountain Mining Corporation.
Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Harmony Gold ten years ago, you're likely feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in April 2014 would be worth $2,785.93, or a gain of 178.59%, as of April 30, 2024, and this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 172.38% and the price of gold went up 73.14% over the same time frame.
Looking ahead, analysts are expecting more upside for HMY.
Earnings estimates for Harmony’s current fiscal have been going up over the past month. Harmony is benefiting from a diverse portfolio of gold development projects. The Wafi-Golpu project is expected to significantly boost the company’s production profile. The Eva Copper project in Australia also represents further upside. Also, the reduction in debt levels work in favor of the company. However, the company is exposed to issues such as mine shut downs and labor strikes. It is facing a tough labor relationship environment. Higher operational and production costs are also a concern. Apart from electricity supply concerns, the company has labor issues. These factors are resulting in high operational costs, which may dent margins. Weaker gold prices may also impact the company’s performance.
Shares have gained 12.61% over the past four weeks and there have been 1 higher earnings estimate revisions for fiscal 2024 compared to none lower. The consensus estimate has moved up as well.
