The Northern Star Resources Ltd (ASX: NST) share price rose 7.47% on Wednesday after a strong half-year earnings result.
The stock is up 14.08% so far this week after announcing better than expected exploration results from its Alaskan Pogo mine on Tuesday and an underlying profit of $89.1 million in its 1H19 earnings on Wednesday.
What was so good about the results?
Between an 11% increase in profit and 43% increase in revenue, it's fair to say it's been a pretty good half for Northern Star. The company sold 423,243 ounces of gold at $1,700/oz during the half, whilst its sustained $83 million exploration investment appears to be paying dividends – literally.
Northern Star's half-year earnings per share were up to $0.13 per share, of which $0.06 per share will go straight to investors in the form of a fully-franked dividend.
Positively, the company remains on track to meet its forecast FY19 production target of 850,000-900,000 ounces at an all-in sustaining cost (AISC) of $1,125-$1,225/oz for 2H19 (down 5-15% on 1H19 AISC).
Is the Northern Star share price a Buy?
Northern Star has proven to be one of the standout resources shares in the last fortnight. Despite the strong production results and strong underlying profit, however, the share price is up just 4.32% year-to-date, less than half that of the 9.10% gain in the S&P/ASX200 Index (ASX: XJO).
The technical environment for gold in 2019 remains sound, particularly if we see further risk-off moves across domestic and global markets and inflation data continues to tick upwards.
In the meantime, I'd be steering clear of gold and looking at energy stocks given strong results from the likes of AGL Energy Limited (ASX: AGL) and Beach Energy Ltd (ASX: BPT) so far this earnings season. With big names like Origin Energy Ltd (ASX: ORG) yet to report, my view is that now may be a great chance to buy.
