Gold Rally Continues: 3 Top Ranked Mining Stocks to Buy Now
The bull market in gold is well underway, yet surprisingly few investors seem to be paying attention. With traders predicting a sharp reversal, there are more doubters surrounding gold’s performance. However, those closely monitoring the market know that gold prices have been on a steady climb over the past two years, delivering a remarkable return of nearly 60% compared to the S&P 500. The current landscape of geopolitical uncertainty and central banks globally adding to their gold reserves assures the metal’s appeal as a hedge against these uncertainties remains strong.
For investors looking to capitalize on this rally, mining stocks present a particularly attractive opportunity. This article highlights three top-ranked mining stocks – Idaho Strategic Resources (IDR), Barrick Gold (GOLD), and Iamgold (IAG) – each positioned to benefit from the continued rise in gold prices.
Idaho Strategic Resources: Momentum and Earnings Growth
Idaho Strategic Resources is a small-cap mining company that has shown remarkable momentum, with its stock price surging an impressive 135% year-to-date. Analysts are becoming increasingly bullish on the stock, as evidenced by a staggering 167% increase in fiscal year 2024 earnings estimates over the past two months. This impressive outlook signifies a strong confidence in the company’s future profitability and growth prospects.
Over the past five years, Idaho Strategic Resources has demonstrated exceptional long-term performance, with its stock price climbing 550%. Despite this impressive trajectory, the company still trades at an attractive valuation of 20.7x one-year forward earnings, which is below its five-year median of 27x. This suggests potential value for investors as it is slightly above the industry average of 18.4x, creating an appealing blend of growth at a reasonable price.
Barrick Gold: A Leading Player with Strong Fundamentals
Barrick Gold stands as one of the most recognized names in the mining industry, providing investors with robust exposure to gold through a well-established and globally diversified company. With a current rating of Strong Buy, Barrick has consistently exhibited solid financial performance, making it a top choice for those seeking stability along with growth potential amid rising gold prices.
In the last two months, earnings estimates for the company have risen significantly, with FY24 estimates up by 8.6% and FY25 by 11.1%. Barrick Gold’s earnings are projected to grow at an impressive annual rate of 33% over the next three to five years. The company remains fairly valued with a forward earnings multiple of 16.1x, lending to a PEG ratio of just 0.5. Barrick has also been prudent in cash management, boasting approximately $4 billion in cash reserves while returning around $700 million to shareholders via dividends and launching a $1 billion share repurchase program. The company’s debt-to-capital ratio has improved, lying below the industry average, showcasing effective management practices.
Iamgold: Huge Potential
Iamgold is a mid-tier gold mining firm operating across North America, South America, and West Africa, recognized for its diverse production portfolio and commitment to sustainable mining practices. The company is in the development phase of its flagship Côté Gold project in Ontario, slated to be one of the largest gold mines in North America, which is expected to significantly enhance its production capabilities.
Similar to its peers, Iamgold has been experiencing an upward trend in earnings revisions. Over the past two months, its FY24 earnings estimates have increased by 45.5% and FY25 estimates by 24.1%. The sales growth forecasts are noteworthy as well, projecting an increase of 56.7% for FY24 and 20.5% for FY25. Despite these bullish projections, Iag trades at a one-year forward earnings multiple of just 10.9x, significantly below the industry average of 18.4x, and well under its five-year median of 16.4x, suggesting excellent value at current levels.
A key feature of Iamgold’s investment appeal is the potential of its flagship Côté Gold project, expected to kick-start commercial production by early 2025. This project could vastly increase Iamgold’s production capacity and is a significant catalyst for the company moving forward.
Should Investors Buy Gold Mining Stocks?
The ongoing gold rally exhibits no signs of tapering, and mining stocks such as Idaho Strategic Resources, Barrick Gold, and Iamgold provide investors distinct opportunities to align themselves with this trend. Gold traditionally offers an uncorrelated source of returns, often moving independently from conventional assets such as stocks and bonds, thereby enhancing portfolio diversification.
As a hedge against economic uncertainty, currency devaluation, and geopolitical risks, gold’s value persists during periods of market volatility and inflation, solidifying these mining stocks as an appealing investment strategy for discerning investors looking to navigate challenging market landscapes.
