Shares of SSR Mining (SSRM) climbed nearly 6% on Tuesday after the company announced it will merge with Alacer Gold. The new company has an implied market value of $4 billion.
On Wednesday, small-cap Canadian silver and gold mining company SSR Mining (formerly called Silver Standard Resources) hit a key milestone. Its Relative Strength (RS) Rating jumped into the 90-plus percentile with an upgrade to 92, up from 89 the day before.
IBD’s RS rating tracks market leadership with a 1 (terrible) to 99 (excellent) score. The score shows how a stock’s price performance over the last 52 weeks stacks up against all the other stocks.
The deal, which the companies describe as a “merger of equals” comes amid a bullish gold market, with the price of gold recently surging to a near-term high.
The new company will be called SSR Mining and it will be headquartered in Denver, Colo. Rodney Antal, currently CEO of Alacer Gold, will head the new company.
High Quality, Long-Life Mines
Antal said in a news release Monday, “The combination of Alacer and SSR Mining will create a diversified portfolio of high quality, long-life mines across four mining-friendly jurisdictions.”
SSR saw both earnings and sales growth rise last quarter. Earnings per share growth rate soared from 156% to 650% vs the same quarter a year ago. Revenue growth rose from 29% to 71%.
The company earns the No. 6 rank among its peers in the Mining-Gold/Silver/Gems industry group. AngloGold Ashanti (AU), Franco Nevada (FNV) and Kirkland Lake Gold (KL) are among the top five highly rated stocks in the group.
On Wednesday afternoon SSR gave back a fraction of Tuesday’s gain, dipping 1.5% to 17.82 amid a market pullback. AngloGold fell 2.6% to 24.72. Franco Nevada and Kirkland Lake also fell.
See How IBD Helps You Make More Money In Stocks
SSR has moved more than 5% past a 17.35 entry in a third-stage cup with handle, meaning it’s now out of a proper buy zone. Look for the stock to create a new chance to pick up shares like a three-weeks tight or pullback to the 50-day or 10-week line.
When looking for the best stocks to buy and watch, keep a close on eye on relative price strength.
Decades of market research shows that the stocks that go on to make the biggest gains tend to have an RS Rating north of 80 at the beginning of a new price run.
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