NTO

[David Randolph]

NTO's profile: Northern Orion Resources Incorporated. The Group's principal activity is exploration and development of copper, gold, molybdenum, silver, cobalt and other minerals. The Group operates primarily in Argentina and Cuba.

The company will release earnings on Monday. I want to buy it today before the earnings release, here's why:

Northern Orion Reports Record Quarterly Earnings

Highlights:

«Northern Orion is pleased to report record quarterly net earnings of $12,871,000 or $0.09 per share for the three months ended September 30, 2005 ("Q3 2005") compared to net earnings of $5,721,000 or $0.05 per share for the same period in 2004 ("Q3 2004").»

If we annualize this we get $0.36 in EPS, so the earnings multiple is $3.97/$0.36 = 11.

But it gets better, read this:

«Average realized copper price was $1.85 per pound and average realized gold price was $452 per ounce in Q3 2005. The Company's share of Alumbrera sales during the quarter was 12,856,000 pounds of copper and 16,072 ounces of gold.»

You know copper and gold prices now are much higher than this, so almost certainly the company will report more than $0.09 in EPS for the 4th quarter.

So the earnings multiple on NTO is even lower than 11 and shortly everybody will see it and jump on the bandwagon. NTO will report 4th quarter earnings on Monday: Northern Orion to Release Fourth Quarter and Year-End Results on March 6, 2006

NTO is a cheap copper and gold producer, and the chart is bullish.

I'll buy NTO for the Stocks on Fire Portfolio around today's open, 6.66% as usual.

[jkotlicki]

Hi David,
A very good pick!!!
I am a holder of The Candian Warrants for more than a year. It is a great stock with a great fundamental future.
Jacob

[jkotlicki]

Another note:
From looking at the earning of  their partners at the Alumbrera mine I can guess that Nto earning would be around 20m for the 4th Q

[David Randolph]

Hi David,
A very good pick!!!
I am a holder of The Candian Warrants for more than a year. It is a great stock with a great fundamental future.
Jacob

Thanks Jacob, it looks that way ...

Another note:
From looking at the earning of their partners at the Alumbrera mine I can guess that Nto earning would be around 20m for the 4th Q

Thanks for that fundamental indsight. I still don't know much about NTO, but I sure like the fact that it closed at a new all time high on Friday 

You say $20M on Q4? That would be awesome, since they made «just» $12.87M on Q3.

Earnings will probably be released after the close today, expect a pop up tomorrow.

I look forward to get those earnings from NTO and probably I'll continue holding after earnings, since a positive surprise usually has an effect that goes beyond the initial market reaction.

[AussieTrader]

VANCOUVER, British Columbia--(BUSINESS WIRE)--March 6, 2006--Northern Orion
(TSX:NNO)(AMEX:NTO) is pleased to report record net earnings of $18,695,000
($0.13 per share) for the fourth quarter of 2005 ("Q4 2005") and net earnings of
$44,128,000 ($0.31 per share) for the year ended December 31, 2005, compared
with net loss of $16,477,000 ($0.15 per share) and net earnings of $1,229,000
($0.01 per share) for the same periods in 2004 respectively.


Fourth Quarter 2005 Highlights


- The Company's share of operating cash flow before interest,  depletion,
depreciation, amortization and tax ("EBITDA") from  Alumbrera was $31,295,000
($0.21 per share) for the quarter, compared  to $16,027,000 ($0.14 per share)
for the fourth quarter of 2004 ("Q4  2004"), representing an increase of 95%.


- Equity in earnings from Alumbrera was $20,260,000 ($0.14 per  share) in Q4
2005, compared to $9,275,000 ($0.08 per share) for Q4  2004, an increase of
118%.


- Average realized copper price was $2.27 per pound (Q4 2004 -  $1.51) and
average realized gold price was $498 per ounce (Q4 2004 -  $451). The Company's
share of Alumbrera sales during the quarter was  16,498,000 pounds of copper (Q4
2004 - 10,970,000) and 23,067 ounces  of gold (Q4 2004 - 17,301). Compared to Q4
2004, copper and gold  prices increased 50% and 10% respectively, and copper and
gold sales  increased 50% and 33% respectively.


- During the quarter, the Company repaid the entire balance of  its term loan
with Bayerische Hypo-und Vereinsbank ("HVB") to become  debt-free.


Full Year Highlights


- The Company's share of operating cash flow before interest,  depletion,
depreciation, amortization and tax ("EBITDA") from  Alumbrera was $75,500,000
($0.53 per share) for the year, compared to  $58,243,000 ($0.53 per share) for
2004, representing an increase of  30%.


- Equity in earnings from Alumbrera was $46,755,000 ($0.33 per  share) in 2005,
compared to $32,659,000 ($0.30 per share) for 2004,  an increase of 43%.


- Average realized copper price was $1.88 per pound (2004 -  $1.36) and average
realized gold price was $452 per ounce (2004 -  $415). The Company's share of
Alumbrera sales during the quarter was  50,666,000 pounds of copper (2004 -
46,408,000) and 71,777 ounces of  gold (2004 - 75,507). Compared to 2004, copper
and gold prices  increased by 38% and 9% respectively. Copper sales increased by
9%  while gold sales decreased by 5%.


- During the year, the Company made significant progress on a  feasibility study
for the development of its Agua Rica project. The  study is expected to be
completed by mid 2006, and discussions for  the financing of the project are
well under way.


- In February 2005, the Company raised gross proceeds of  Cdn.$125,012,500
(U.S.$101,637,000) from a short-form prospectus  offering of units. The proceeds
of this financing are intended to be  for development of the Agua Rica project.


- During the year, the Company realized a foreign exchange gain  of $2,033,000
by converting a portion of its cash held in Canadian  dollars (Cdn.$74 million)
into U.S. dollars.


- At December 31, 2005, the Company had a cash position  (including temporary
investments) of $135,911,000.


"2005 was a very successful period for the Company as copper  prices reached
all-time highs and we generated record net earnings,"  said David Cohen,
President and CEO of Northern Orion. "In 2006, we  intend to build on the
momentum created by the significant progress  at Agua Rica through 2005. We will
complete the Agua Rica feasibility  study, advance our commercial negotiations
for its project financing  and for concentrate off-take in order to commence
mine construction  at Agua Rica. We believe that 2006 will be another good year
for  earnings and we look forward to building our cash position with  continued
strong cash flows from Alumbrera as the outlook for metal  prices stays
positive."


Teleconference call details


Northern Orion will host a telephone conference call and webcast  on Tuesday 7th
March at 10:00 a.m. Eastern (7:00 a.m. Pacific) to  discuss these results. The
conference call may be accessed by dialing  1-800-319-4610 in Canada and the
United States, or 1-604-638-5340  internationally and the webcast may be
accessed by going to  http://services.choruscall.com/links/orion--fyr05.html.

[David Randolph]

Thanks for posting the results AussieTrader 

I believe they were great ! $0.13 a share for the quarter gives me $0.52 EPS for a full year, so the earnings multiple is 7.78.

This company is undervalued because people don't believe copper prices will stay this high for long. But they can be wrong, as often analysts are ... bull trends always go much beyond anybody expects, and the basic materials bull market can be just beginning.

Anyway, the stock is down 2% as I write, because copper futures are down 1.3%.

I continue to be a bull on NTO, as I think the copper mining group will be a stellar performer in 2006.

[snowcat]

Maybe the stock is down because the higher copper prices were already factored into the price?

[fous]

Strange day for NTO, still i believe this too be a good pick. Price action looks to be forming an ascending triangle. Im buying if and when it breaks out. Pivot long is 4.10.

-fous

[Stocksquire]

IMO, NTO is way undervalued, and is a long term hold.  The current stock price reflects only its 12.5% ownership stake in Alumbrera, and does not give ANY value to its $100billion asset, Auga Rica.  The bankable feasibility study for AR is due out next quarter, at which time this stock will likely either be bought out, or trading considerably higher than its current price.

The CEO gave a very informative conference call this morning, and if you haven't heard it, I highly recommend listening to the webcast version, which you can find on NTO's website.  The numbers and projections should blow you away.

Anyway, I have been a big fan of NTO for a few years now.  While I do take the opportunity to trade the volatility, the closer they get to the completition of the bankable feasibility study, the less inclined I am to trade it and possibly miss out on a parabolic rise in the stock price.  Note that this stock almost always has large price swings, so it is not for the faint of heart.  The long term trend, however, should be much higher.

There is a lot of good info on the company's website.  I also started a link for NTO here a few months ago:  http://www.3stocksonfire.org/trading/index.php?topic=3914.0

[fous]

In this morning at 3.92. Looks like we got a nice looking morning doji start forming here.

-fous

Morning Doji Star

Significance: bullish

Indication: reversal

# of candles: 3

Previous Trend: Bearish

The Morning Doji Star pattern is characterizes by 3 candles. The fisrt day is a long black candle reinforcing the already bearish downtrend. The second is gaps down and forms a doji candle, indicating confusion in the market and a reversal could be upon us. And finally the 3rd day forms a white candle whose closing price pushes well into the real body of the first black day that occurred in this pattern. A gap up on the 3rd day is preferred for an ideal bullish Morning Star pattern though is not required. Confirmation of this pattern is provided by a higher close on the 4th day.

Note: Candlestick reversal patterns are significantly more potent when occuring near areas of support and resistence.

[Stocksquire]

The price of gold is correcting, causing NTO and other miners to fall today.  Patience is the key to holding the miners.  Gold and other metals are still in a long term bull market, but, like everything else, there are corrections along the way.

[eliteG]

Thanks for posting the results AussieTrader 

I believe they were great ! $0.13 a share for the quarter gives me $0.52 EPS for a full year, so the earnings multiple is 7.78.

This company is undervalued because people don't believe copper prices will stay this high for long. But they can be wrong, as often analysts are ... bull trends always go much beyond anybody expects, and the basic materials bull market can be just beginning.

Anyway, the stock is down 2% as I write, because copper futures are down 1.3%.

I continue to be a bull on NTO, as I think the copper mining group will be a stellar performer in 2006.

NTO - seems to be content hanging around inside the ascending triangle waiting for things to happen and for now we will let this trade develop.  Just in case it does not(we must be prepared in every play) we will place a stop @ 3.48 in case the ascending triangle is broken and cannot recover.   

We will hold NTO with a stop of 3.48.

[eliteG]

update NTO:

NTO is attacking the top of its ascending triangle.    It is good to see volume go up with a move like this and I would think it normal to see some price rejection Friday.  The placement of my stop was too far away and I am glad I get to fix it right here.  I am going to get aggressive and count on the 20ema being able to provide support.

We will sell NTO if it hits our stop @ 3.83.

[eliteG]

update NTO:

Since the last update NTO broke its ascending triangle on great volume!  We will use that triangle projection to put in a target sell of 4.90.  Our stop-loss also moves up to a sell if close below 3.95.  NTO looks fantastic!

We are holding NTO but will sell if it reaches our target of 4.90 or is set to close below 3.95.

[jkotlicki]

Hi,
A question for any trade:

Why wouldn't you on a any winner trade let it run it course with a tight trailing stop order & not put a deffinite sell price?

Thanks,

Jacob