7 Gold Stocks to Buy for the Forward-Thinking Contrarian


  • Investors concerned about macro-level events should consider these gold stocks to buy.
  • Royal Gold (RGLD): Royal Gold features decent financials.
  • Wheaton Precious Metals (WPM): Wheaton enjoys a consensus strong buy view.
  • Centerra Gold (CGAU): Centerra is an undervalued big mover.
  • Newmont (NEM): Newmont’s massive footprint should become relevant.
  • Yamana Gold (AUY): Yamana may benefit from powerful upside potential.
  • Gold Fields (GFI): Gold Fields is risky but compelling.
  • Barrick Gold (GOLD): Barrick is for those who swing for the fences.
gold stocks to buy - 7 Gold Stocks to Buy for the Forward-Thinking Contrarian

Source: Shutterstock

While the precious metals complex presented a perplexing picture throughout the new normal, now may be the time to strategize entry into certain gold stocks to buy. As gold bull Juerg Kiener, managing director, and chief investment officer of Swiss Asia Capital, told CNBC late last year, gold could surge to $4,000 per ounce.

Undergirding this optimistic thesis stands Kiener’s belief that many economies still suffer from recessionary conditions. Therefore, some central banks may slow their pace of interest rate hikes, making precious metals much more attractive. In turn, this dynamic could bolster compelling gold stocks to buy. As well, the World Gold Council reported that central banks bought 400 tonnes of gold in the third quarter. This tally nearly doubled the previous record of 241 tonnes during the same period in 2018.

“Since [the] 2000s, the average return [on] gold in any currency is somewhere between 8% and 10% a year. You haven’t achieved that in the bond market. You have not achieved that in the equity market,” Kiener remarked. If you feel the same way, below are potentially attractive gold stocks to buy.

RGLD Royal Gold $120.80
WPM Wheaton Precious Metals $41.61
CGAU Centerra Gold $6.54
NEM Newmont $44.10
AUY Yamana Gold $5.22
GFI Gold Fields $9.24
GOLD Barrick Gold $16.31

Royal Gold (RGLD)

A pile of shining gold bars.
Source: Shutterstock

Billed as one of the world’s leading precious metals stream and royalty companies, Royal Gold (NASDAQ:RGLD) owns a large portfolio of producing, development, evaluation, and exploration stage streams and royalties. Generally, it’s fared better than other gold stocks to buy across recent sessions. Since the Jan. opener, RGLD gained a bit over 1%. And in the trailing year, it’s down 2.5%, mitigating some of the sharp losses seen in the space.

While the precious metals complex presents volatility risks, Royal Gold assuages fears with a solid fiscal profile. Operationally, the company commands a three-year revenue growth rate of 12.5%, ranked better than 64.2% of its peers. On the bottom line, the enterprise features a net margin of nearly 40%. This stat outpaces almost 93% of the competition. Finally, Wall Street analysts peg RGLD as a consensus moderate buy. Further, their average price target stands at $132.57, implying over 12% upside potential.

Wheaton Precious Metals (WPM)

An image of a rising bar graph on top of gold bars, representing gold stocks
Source: Alexander Limbach / Shutterstock

Based in Canada, Wheaton Precious Metals (NYSE:WPM) specializes in streaming gold and silver assets. Rather than mining the metals themselves, Wheaton provides upfront capital to mining specialists. In return, Wheaton receives a portion of the metals extracted. Because of the inherently improved predictability of the streaming business model, WPM ranks among the more stable gold stocks to buy.

For instance, since the January opener, WPM gained over 1%. In the trailing year, it mitigated losses to 6% below parity. While it’s still in the red, several other direct mining plays suffered far steeper losses.

To be fair, Gurufocus.com identifies WPM as a modestly overvalued investment. However, the company enjoys several strong fiscal attributes. Perhaps most notably, it features an extremely stable balance sheet. For instance, its Altman Z-Score shot up into the triple digits, signifying extremely low bankruptcy risk. Operationally, Wheaton benefits from solid sales growth and excellent profit margins.

Lastly, Wall Street analysts peg WPM as a consensus strong buy. Further, their average price target stands at $47.77, implying 16% upside potential. Thus, it makes for a solid case for gold stocks to buy.

Centerra Gold (CGAU)

A photo of a gold nugget on a table, being picked up by tweezers, with more gold behind it.
Source: aerogondo2 / Shutterstock.com

Also based in Canada, Centerra Gold (NYSE:CGAU) owns and operates the Mount Milligan copper-gold mine in its home turf of British Columbia. As well, it owns and operates a gold mine in Turkey. As a warning, Centerra represents one of the big movers among gold stocks to buy. But that also applies in both directions.

For example, since the Jan. opener, CGAU shot up nearly 18%, an impressive haul. Fundamentally, initial speculation that the Federal Reserve will loosen its aggressive rate hike policy bolstered CGAU. However, in the trailing year, shares gave up more than 35% of equity value.

Still, it could be an interesting gamble for gold bugs. According to Gurufocus.com’s proprietary calculations for fair market value (FMV), Centerra rates as modestly undervalued. Objectively, the market prices CGAU at a trailing book multiple of 0.76. As a discount to book, Centerra ranks better than nearly 79% of the competition. Presently, covering analysts peg CGAU as a consensus moderate buy. Moreover, their average price target stands at $7.69, implying nearly 22% upside potential.

Newmont (NEM)

A gold bar along with some coins made of precious metals. gold stocks
Source: allstars / Shutterstock.com

For those that want to take a speculative walk down gold stocks to buy, Newmont (NYSE:NEM) now offers that opportunity. Fundamentally, that’s not how this was supposed to happen. Per its website, Newmont represents the world’s leading gold company. In addition to yellow metal, it produces copper, silver, zinc, and lead. At the time of writing, Newmont sports a market capitalization of over $35 billion.

Despite its massive footprint, investors took a dim view of NEM and its prospects. Since the Jan. opener, NEM gave up almost 13% of its equity value. And in the trailing year, shares plunged over 34%. Looking at the financials, Newmont looks riskier. For instance, Gurufocus.com warns it’s a possible value trap.

Still, it still carries positive attributes, including an operating margin of 13.47%. This stat outpaces 68% of sector peers. Also, the sheer size and relevance of this enterprise give it considerable come-back credibility. Wall Street analysts apparently feel the same, pegging NEM as a consensus moderate buy. Also, their average price target stands at $55.11, implying over 27% upside potential. Thus, it’s one of the possible ideas for gold stocks to buy.

Yamana Gold (AUY)

Gold nuggets on top of American paper money representing gold stocks
Source: Shutterstock

Another Canadian mining firm, Yamana Gold (NYSE:AUY) owns and operates gold, silver, and copper mines in Canada, Chile, Brazil, and Argentina. To be sure, it’s an odd performer. Since the start of the year, AUY gave up nearly 12% of its equity value. However, in the trailing 365 days, shares gained over 3%.

Also, in the trailing five years, AUY stands at nearly 72% above parity. Therefore, slow and steady may be the best way to approach Yamana. At the moment, Gurufocus.com labels AUY as a fairly valued investment. Objectively, the market prices AUY at a trailing book multiple of 1.13. As a discount to this metric, Yamana ranks better than 64.51% of the competition.

Operationally, the company enjoys strong profitability. For instance, its operating margin pings at 26.88%, bidding out 83.57% of its rivals. Also, its return on equity is 5.88%, above 81% of its peers, thus reflecting an extremely high-quality business. Turning to Wall Street, covering analysts peg AUY as a consensus moderate buy. As well, their average price target stands at $6.68, implying nearly 32% upside potential.

Gold Fields (GFI)

Closeup of a large gold nugget. stocks under $10
Source: Shutterstock

Representing one of the world’s largest gold mining firms, Gold Fields (NYSE:GFI) calls resource-rich South Africa home. Per its public profile, the company owns and operates mines in South Africa, Ghana, Australia, and Peru. Unfortunately, Gold Fields’ massive size hasn’t been too much of a help in the charts.

Since the Jan. opener, shares tumbled nearly 16%. In the trailing year, they gave up 35% of equity value. Still, the erosion in price may be a selling point for speculators. For example, the company’s price-earnings-growth ratio now sits at 0.36 times. In contrast, the sector median PEG ratio is 0.85. This ranks Gold Fields better than 75% of its peers.

Operationally, the company’s three-year revenue growth rate stands at 17.6%, beating out 75.55% of competitors. Its net margin is 16.3%, above 78.43% of the industry. Looking at the Street’s guidance, GFI enjoys a consensus moderate buy rating. Moreover, experts believe GFI will hit $12.50, implying 37% upside potential. Thus, it’s one of the higher-risk, higher-reward gold stocks to buy.

Barrick Gold (GOLD)

gold bars representing gold stocks
Source: Shutterstock

Headquartered in Toronto, Ontario, Barrick Gold (NYSE:GOLD) produces gold and copper with 16 operating sites in 13 countries. On paper, it should be one of the more relevant gold stocks to buy. The target asset fundamentally represents a hedge against inflation and overall economic uncertainty. And copper is a critical component of myriad industries, including electric vehicles.

Sadly for stakeholders, this relevancy didn’t spare GOLD volatility. Since the Jan. opener, shares stumbled over 10%. And in the trailing year, they gave up over 29% of equity value. Still, Gurufocus.com labels GOLD as modestly undervalued per its FMV calculations. Objectively, the market prices GOLD at a trailing book multiple of 1.23. As a discount to the metric, Barrick ranks better than 60.36% of the industry.

Notably, Barrick features an operating margin of 27.25%, beating out 84% of its peers. As well, it enjoys six years of profitability over the past decade. Finally, covering analysts peg GOLD as a consensus moderate buy. Further, their average price target stands at $22.09, implying over 38% upside potential.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Article printed from InvestorPlace Media, https://investorplace.com/2023/03/7-gold-stocks-to-buy-for-the-forward-thinking-contrarian/.

©2024 InvestorPlace Media, LLC