Barrick Gold (ABX) was one of our top picks for 2014 and the chart has done nothing but get better as the year has progressed – there is ample potential for a huge breakout over the coming weeks:

Click to enlarge

ABX_Daily_2.20.2014

RBC upgraded Barrick to outperform this morning:

“We believe Barrick has the ability to Outperform peers as a result of (1)increasing free cash flow through execution on its mine plan revisions, which saw life-of-mine average grades for operating mines increase by 21% to 0.058 oz/ton from 0.048 oz/ton previously, (2) continued divestment of higher AISC assets, such as African Barrick Gold, and (3) advancement of its longer-term development projects, including Goldrush and Pascua-Lama. Barrick is trading at a forward cash flow multiple of 7x and NAV multiple of 1.25x, well below the historical industry average of 13x and Barrick’s historical average of 1.3x respectively.”

The following chart from a recent Barrick presentation also helps to illustrate why the market has taken a more favorable view of Barrick’s shares recently:

ABX_Profit_Before_OUnces

Related:

“Barrick is too Cheap to Pass Up” 

“Why did George Soros buy a position in Barrick Gold in Q4 2013?”