3 Dusty Gold Stocks to Buy That Will Shine Again Soon

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While you weren’t looking, gold prices have quietly rallied over the last few months. The combination of a falling dollar, weakness in the global economy and various negative interest rate policies in Japan and Europe have pushed prices up for the yellow metal not seen in over 15 months.

3 Dusty Gold Stocks to Buy That Will Shine Again Soon

Today, gold can be had for just under $1,300 per ounce. Needless to say, that higher price has been great for the various gold stocks.

Shares of gold stocks — as represented by the Market Vectors Gold Miners ETF (GDX) — are up a whopping 74% since the start of the year. Better earnings await the long-suffering gold stocks as many have continued to reduce their all-in cash cost per ounce.

Any continued boost to gold prices will directly translate back into profits at the miners.

And these stocks may continue to benefit from high, long-lasting gold prices. Many of the same factors that have driven prices higher in recent weeks have only gotten stronger. Investors take note: The rally in gold could still be in the early stages.

With that in mind, there could still be time to bet on gold. Here are three of the best gold stocks to buy today.

Gold Stocks to Buy Today: Goldcorp Inc. (USA) (GG)

Gold Stocks to Buy Today: Goldcorp Inc. (USA) (GG)As one of the lowest cost producers of gold, top-tier miner Goldcorp Inc. (USA) (GG) could be one of the best gold stocks to buy for the latest uptrend in prices.

Since the bust, GG has worked hard at shifting its mine mix to only focus on the most profitable assets. That includes cutting CAPEX spending and selling non-core high-cost assets.

Those efforts continue to bear fruit. Goldcorp continues to see its all-in cash costs drop. For the latest reported quarter that number fell an additional 6% to reach just $836 per ounce. As long as gold is above this amount, GG is making money.

With gold currently near $1,300, GG should finally have ample free cash flows and profits.

In fact, Goldcorp expects to generate more than $400 million in free cash flows with gold at roughly $1,200. Even better is that for every $100 rise in the price of gold, Goldcorp estimates that it should add an additional $288 million on top of that number. That’s just more cash to add to its already large $3.2 billion pile of liquidity.

Given its strong balance sheet, low all-in costs and dividend policy, Goldcorp was already one of the best gold stocks for investors to buy. That fact has only gotten stronger with higher gold prices.

Gold Stocks to Buy Today: Kinross Gold Corporation (USA) (KGC)

Gold Stocks to Buy Today: Kinross Gold Corporation (USA)Higher gold prices may finally be the answer to Kinross Gold Corporation (USA)‘s (KGC) prayers.

Back during the previous gold boom, KGC was one of the most promising gold stocks. It was quickly moving from just being a mid-tier producer to a top-tier one. However, one bad deal with a ton of debt and plunging gold prices took the $20+ stock and sent it down into the single digits.

Over the last five or so years, KGC has worked hard to remove as much of that debt burden from its balance as possible. That hasn’t always been easy with gold prices down in the dumps. Higher prices will allow it to remove more of that debt from its balance sheet.

Less debt also gives it more room to do something it hasn’t been able to do before — actually use the assets it purchased in the first place.

KGC bought the Tasiast mine as part of its debt-fueled spending spree. Low gold prices and high debt made the mine unprofitable. With some freed up cash, Kinross is plowing head first into an expansion project at the mine that will help drop its all-in cash cost to just $760 per ounce.

As a turnaround play, KGC is the gold stock to buy with rising prices.

Gold Stocks to Buy Today: Barrick Gold Corporation (USA) (ABX)

Gold Stocks to Buy Today: Barrick Gold Corporation (USA) (ABX)Like previous pick KGC, sector stalwart Barrick Gold Corporation (USA) (ABX) has suffered under the weight of an ill-timed acquisition and low gold prices. However, for this once mighty gold titan, the turnaround is already at hand.

Last year, ABX shed more than $3 billion in debt from its balance sheet. So far in 2016, another $842 million has been repaid with management estimating that just over $2 billion in debt will be removed this year.

In addition to the much-needed debt reduction, ABX has continued to improve its asset mix via sales as well as reduce costs of production. By applying new technology, reducing inefficiencies and reducing its labor costs, ABX has managed to drop its all-in cash costs down to just $706 per ounce.

Lower debts and lower costs have helped Barrick now report four consecutive quarters of positive free cash flows. That’s huge news for this gold star. With gold now approaching $1,300 per ounce, ABX should be able to further reduce debt as well as significantly increase free cash flows. All of which could mean that Barrick could start boosting its formerly high dividend once again.

All in all, ABX gold is one of the best values in gold stocks today.

As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.

Aaron Levitt is an investment journalist living in Ohio. With nearly two decades of experience, his work appears in several high-profile publications in both print and on the web. Also likes a good Reuben sandwich. Follow his picks and pans on Twitter at @AaronLevitt.


Article printed from InvestorPlace Media, https://investorplace.com/2016/05/3-gold-stocks-buy-shine-gg-abx-kgc/.

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