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Harmony stock plummets

Johannesburg - Harmony Gold Mining stock dropped nearly 4% in early trade on Monday‚ taking the losses to more than 8% since last Thursday‚ when SA’s third-largest gold producer posted results that fell below analysts’ estimates.

“Harmony’s price-to-earnings ratio (of 14.07) is also expensive relative to its peers such as AngloGold Ashanti and Gold Fields‚” said Rob Towell‚ senior equities trader Consilium Securities. He said Harmony also had a higher cost base than its two competitors.

However‚ Towell said the sell-off might be overdone in the short term‚ arguing that the share could find some support at the R76-R78 level.

Harmony [JSE:HAR] reported an almost doubling in its headline earnings per share to 551 cents‚ for the year ended June 2012 from 223 cents a year ago.

The I-Net consensus forecast was for 635.5 cents.

At 11.32‚ the company was down R2.73 or 3.40% at R77.63 on the JSE‚ its lowest level in more than three weeks.

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