Last Thursday, I wrote about five precious metals stocks that were preparing for a move higher as investors seemed preoccupied — as 2015 gets started — with safe havens instead of risk taking. This week, the theme has continued. The 10-year U.S. Treasury yield has dropped to just 1.9%, stocks have slumped., and crude oil has dropped to fresh lows.
In response, gold and silver stocks have soared as investors batten down the hatches ahead of a number of big catalysts in the weeks to come, from elections in Greece to big decisions on bond buying stimulus from the European Central Bank.
Further gains look likely as precious metals push off of a long, three-year consolidation pattern following the meltdown from the 2011 highs. So here are five more stocks in the sector that are good to go for new money.
Allied Nevada Gold (ANV)
Allied Nevada Gold (ANV), as its name suggests, it focused on gold and silver mining on its assets in Nevada. Primarily, it’s working on its Hycroft Mine, an open pit heap leach west of Winnemucca.
The company was initiated with a buy rating by analysts at H.C. Wainwright back in late December because of the “intriguing investment opportunity at its current valuation in offering exposure to a mid-tier gold producer in a safe and stable jurisdiction.”
A mere return to its 200-day moving average would be worth a 100%-plus move from current levels.
Golden Star Resources (GSS)
Golden Star Resources (GSS) owns and operates mining facilities concentrated in Ghana and other parts of West Africa as well as South America. The company slightly lowered its 2015 production guidance on Monday, due to power supply issues in Ghana, but should see top-line relief from a rebound in metals prices if current trends hold.
Shares lost more than two-thirds of their value from their June high, and are poised for an oversold rebound.
Coeur Mining Inc (CDE)
Coeur Mining Inc (CDE) is geographically diversified, operating throughout the Americas and Australia. The company’s primary facilities include the Palmarejo silver and gold mine in Mexico and the Kensington mine north of Juneau, Alaska. The company sells its silver and gold concentrates to third-party smelters in Japan and China.
Shares are up more than 70% from their November low, and are poised for more gains. A return to its July high would be worth a gain of 50%-plus from here.
Franco-Nevada Corp. (FNV)
Franco-Nevada Corp. (FNV) shares have been on the move since the middle of December, bolstered by an upgrade by analysts at both Morgan Stanley and Merrill Lynch. Revenue growth has been and is expected to remain strong, with top-line growth expected to hit 15% this year despite the weakness of gold prices lately.
Less risky than the other names here, a return to the August highs would be worth an 11% rise for the stock.
Royal Gold (RGLD)
Based in Denver, Royal Gold (RGLD) focuses on acquiring mine royalties from mines that are in production or in the development phase. This provides a smooth earnings stream and a one-time capital expense, leaving the company open to participating in brownfield expansions to existing facilities without additional capital expense.
As a result, earnings growth has been steady in this difficult environment for the industry. Earnings are expected to grow 33% in the current fiscal year, with another 27% growth in fiscal 2016. Revenues are expected to grow from $237 million in fiscal 2014 to $369 million in fiscal 2016.
A return to the August highs would be worth a 17% move from here.