Despite the fact that gold prices are rapidly dropping at present, especially due to the Federal Reserve’s latest policy comments and the strength of the dollar, precious metals and gold remain a lucrative entry point for long-term investors. Investors who are looking for viable hedges against inflation can make use of commodities and gold to achieve their goal, as mentioned by Katerina Simonetti, the senior Vice President at Morgan Stanley Private Wealth Management in Philadelphia. Gold thus exists as a good option for long-term investments rather than short-term investments. According to Simonetti, the aim should be to ensure good performance in the long run at lower risk levels when looking for a good hedge against inflation.
With the coronavirus pandemic came increasingly difficult challenges to be faced by nearly every industry in the world. But more than just industries taking hits, your average citizen has had to deal with the economic challenges thrown their way just as much. One of the worst of these challenges is inflation, which is on the rise yet again. According to the Bureau of Labor Statistics in their May CPI inflation report, prices have been climbing just as they were in the previous month. In May, the index for car and truck rentals rose by 12.1%, compared to the previous month’s 16.2% hike, while household furnishings and operations index rose by 1.3%, representing a monthly increase so large it became the first of its kind since January 1976. All in all, prices rose by as much as 5% year over year, representing an alarming growth in the CPI.
Typical goods like food and beverages, cars, and household furniture were not the only commodities to see a rise in prices since the advent of COVID-19 though. The economic recession caused by the pandemic also led to rising gold prices, according to S&P Global. In August 2020, gold prices crossed the $2,000 an ounce mark. Investors began stockpiling to secure their own wealth in the panic caused by the pandemic, leading to deficits in the supply of precious metals like gold and silver and subsequent price hikes like the one above. As reported by Reuters this January, the prices of gold and palladium rose by over 20% as well, and silver prices saw an even greater 47% hike. This increase can be attributed to silver’s dual role in being not only a precious metal but also a metal that can be used for industrial purposes.
With rising prices of these precious metals coupled with increasing market volatility thanks to the pandemic, investors are beginning to start eyeing gold and silver stocks more seriously. Silver has been outperforming gold with its greater price hikes while the price of gold has been falling from its $2,043 per ounce high of August 2020. Yet, the market volatility of today and the rising inflation witnessed from the Bureau of Labor Statistic’s reports and the Federal Reserves comments signaling rising expectations for inflation in 2021, bring the attention back to gold. According to CNBC, investors are currently observing gold. Traditionally a safe-haven stock, gold is considered the best place to invest in times of economic recession, while being ignored in times of stability.
As inflation rises, gold and silver mining companies like Newmont Corporation (NYSE: NEM), Barrick Gold Corporation (NYSE: GOLD), Wheaton Precious Metals Corp. (NYSE: WPM) and First Majestic Silver Corp. (NYSE: AG) are getting a lot of attention. We have thus compiled this list of the 10 best gold and silver stocks to buy now.
Investing is becoming difficult by the day, even for the smart money. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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Without further ado, here are the 10 best gold and silver stocks to buy amid rising inflation. We took into account hedge fund sentiment, analysts’ comments, ratings, future growth potential and fundamentals while choosing these stocks.
Best Gold and Silver Stocks to Buy Amid Rising Inflation
10. First Majestic Silver Corp. (NYSE: AG)
Number of Hedge Fund Holders: 15
First Majestic Silver Corp. (NYSE: AG) is a company focusing on the acquisition and exploration of mineral properties. The company primarily operates in silver and gold production in Mexico and holds 100% interest in the San Dimas Silver/Gold Mine, the Santa Elena Silver/Gold Mine, and the La Encantada Silver Mine. It ranks 10th on our list of the best gold and silver stocks to buy amid rising inflation.
This May, First Majestic Silver Corp. (NYSE: AG) declared its quarterly dividend of $0.0045 per share, with a forward yield of 0.12%. The stock has gained 65% over the last 12 months.
By the end of the first quarter of 2021, 15 hedge funds out of the 866 tracked by Insider Monkey held stakes in First Majestic Silver Corp. (NYSE: AG). The total value of their stakes was roughly $54.7 million. This is compared to 12 hedge funds out of 887 in the previous quarter holding stakes valued at about $84.8 million.
9. Alamos Gold Inc. (NYSE: AGI)
Number of Hedge Fund Holders: 22
Alamos Gold Inc. (NYSE: AGI) operates in the acquisition and extraction of gold in North America, Canada, and Mexico. The company also explores silver and other precious metals, and its flagship project is the Young-Davidson mind located in Canada. It ranks 9th on our list of the best gold and silver stocks to buy amid rising inflation.
By the end of the first quarter of 2021, 22 hedge funds out of the 866 tracked by Insider Monkey held stakes in Alamos Gold Inc. (NYSE: AGI). The total value of their stakes was roughly $267 million. This is compared to 17 hedge funds out of 887 in the previous quarter holding stakes valued at about $309 million.
Like Newmont Corporation (NYSE: NEM), Barrick Gold Corporation (NYSE: GOLD), Wheaton Precious Metals Corp. (NYSE: WPM) and First Majestic Silver Corp. (NYSE: AG), Alamos Gold Inc. (NYSE: AGI) is a good precious metal stock to invest in.
Palm Valley Capital mentioned Alamos Gold Inc. (NYSE: AGI) in its first-quarter 2021 investor letter. Here’s what they said:
“Alamos Gold (AGI) is a Canadian-based gold producer with three operating mines in North America. We believe Alamos’s 9.7 million ounces of proven and probable gold reserves are selling at a discount to our calculated replacement valuation. Furthermore, we are attracted to the company’s debt-free balance sheet and its ability to generate free cash flow at current gold prices. As global central banks aggressively expand their balance sheets, we are comforted owning Alamos’s high-quality tangible assets.”
8. iShares Silver Trust (NYSE: SLV)
Number of Hedge Fund Holders: 25
iShares Silver Trust (NYSE: SLV) is an exchange-traded fund managed by iShares Delaware Trust Sponsor LLC. It invests in the commodity markets with a focus on silver. The fund tracks the silver bullion’s daily performance and ranks 8th on our list of the best gold and silver stocks to buy amid inflation.
iShares Silver Trust (NYSE: SLV) has $14.79 billion in assets under management and in the past year, the fund’s price returns have been up 46.03% versus the S&P 500’s price return rise of 36.38%. The fund’s total return has been up 46.03% versus 10.40% for the S&P 500. The stock has gained 2.77% in the past 6 months.
By the end of the first quarter of 2021, 25 hedge funds out of the 866 tracked by Insider Monkey held stakes in iShares Silver Trust (NYSE: SLV). The total value of their stakes was roughly $208 million. This is compared to 28 hedge funds out of 887 in the previous quarter holding stakes valued at about $199 million.
Like Newmont Corporation (NYSE: NEM), Barrick Gold Corporation (NYSE: GOLD), Wheaton Precious Metals Corp. (NYSE: WPM), and First Majestic Silver Corp. (NYSE: AG), iShares Silver Trust (NYSE: SLV) is a good precious metal option to invest in.
7. Pan American Silver Corp. (NASDAQ: PAAS)
Number of Hedge Fund Holders: 27
Pan American Silver Corp. (NASDAQ: PAAS) is a company operating in the extraction and refining of precious metals including silver, gold, zinc, and lead, through mines in Canada, Mexico, Peru, Argentina, and Bolivia. The company holds interests in the La Colorada, Dolores, Huaron, and Morococha mines, among a range of others. It ranks 7th on our list of the best gold and silver stocks to buy amid rising inflation.
Pan American Silver Corp. (NASDAQ: PAAS) declared a $0.07 per share quarterly dividend this May, with a forward yield of 0.84%. For the first quarter of 2021, the company has EPS of $0.18 versus estimates of $0.29 and revenue valued at $368.1 million. The company also has a gross profit margin of 46.36% and has gained 0.84% in the past year. The stock has a consensus Buy rating.
By the end of the first quarter of 2021, 27 hedge funds out of the 866 tracked by Insider Monkey held stakes in Pan American Silver Corp. (NASDAQ: PAAS). The total value of their stakes was roughly $352 million. This is compared to 27 hedge funds out of 887 in the previous quarter holding stakes valued at about $466 million.
Like Newmont Corporation (NYSE: NEM), Barrick Gold Corporation (NYSE: GOLD), Wheaton Precious Metals Corp. (NYSE: WPM), and First Majestic Silver Corp. (NYSE: AG), Pan American Silver Corp. (NASDAQ: PAAS) is a good precious metal stock to invest in.
6. Kinross Gold Corporation (NYSE: KGC)
Number of Hedge Fund Holders: 27
Kinross Gold Corporation (NYSE: KGC) is a company working to acquire and develop gold properties in the US, Russia, Brazil, Chile, Ghana, and Mauritania. The company also extracts and processes gold-containing ores and reclaims gold mining properties while producing and selling silver as well. It ranks 6th on our list of the best gold and silver stocks to buy amid rising inflation.
On June 21st, Kinross Gold Corporation (NYSE: KGC) was reported to have said that mining activities at Tasiast mine in Mauritania have resumed operations after the damage from a fire shut down work last week. Restart costs are expected to be around $5o million, hence the company reduced the total production guidance for this year to 2.1 million ounces of gold. For 2022 and 2023, the company retained annual production guidance at 2.7 and 2.9 million ounces respectively. On June 23rd, the stock was upgraded to Outperform with an $8 price target by Credit Suisse.
For the first quarter of 2021, Kinross Gold Corporation (NYSE: KGC) had EPS of $0.15, in line with estimates for the quarter. Revenue was valued at $986.5 million, representing a 20.31% growth year over year. The company also has a gross profit margin of 59.2%.
By the end of the first quarter of 2021, 27 hedge funds out of the 866 tracked by Insider Monkey held stakes in Kinross Gold Corporation (NYSE: KGC). The total value of their stakes was roughly $444 million. This is compared to 36 hedge funds out of 887 in the previous quarter holding stakes valued at about $694 million.
Like Newmont Corporation (NYSE: NEM), Barrick Gold Corporation (NYSE: GOLD), Wheaton Precious Metals Corp. (NYSE: WPM), and First Majestic Silver Corp. (NYSE: AG), Kinross Gold Corporation (NYSE: KGC) is a good precious metal stock to invest in.
5. Agnico Eagle Mines Limited (NYSE: AEM)
Number of Hedge Fund Holders: 28
Agnico Eagle Mines Limited (NYSE: AEM) is a company focusing on the exploration and production of mineral properties in Canada, Sweden, and Finland. It operates through two segments, namely the Northern Business and Southern Business segments. The company mainly produces and sells gold deposits, while also exploring silver, zinc, and copper deposits. It ranks 5th on our list of the best gold and silver stocks to buy amid rising inflation.
This April, Agnico Eagle Mines Limited (NYSE: AEM) declared its $0.35 per share quarterly dividend with a forward yield of 2.2%. For the first quarter of 2021, the company had EPS valued at $0.67 versus the estimate of $0.60. Revenue for the quarter was valued at $934.39 million, representing a 29.08% growth year over year.
By the end of the first quarter of 2021, 28 hedge funds out of the 866 tracked by Insider Monkey held stakes in Agnico Eagle Mines Limited (NYSE: AEM). The total value of their stakes was roughly $247 million. This is compared to 36 hedge funds out of 887 in the previous quarter holding stakes valued at about $388 million.
4. Wheaton Precious Metals Corp. (NYSE: WPM)
Number of Hedge Fund Holders: 28
Wheaton Precious Metals Corp. (NYSE: WPM) is a mining company that mainly works in selling precious metals in Canada and internationally. The company sells a range of metals including gold, silver, palladium, and cobalt. It had agreements for 24 operating mining assets and 7 development stage projects. The company ranks 4th on our list of the best gold and silver stocks to buy amid rising inflation.
By the end of the first quarter of 2021, 28 hedge funds out of the 866 tracked by Insider Monkey held stakes in Wheaton Precious Metals Corp. (NYSE: WPM). The total value of their stakes was roughly $439 million. This is compared to 34 hedge funds out of 887 in the previous quarter holding stakes valued at about $755 million.
3. Newmont Corporation (NYSE: NEM)
Number of Hedge Fund Holders: 43
Newmont Corporation (NYSE: NEM) is a mining company working mainly in the production and exploration of gold. The company also explores copper, silver, zinc, and lead. It has operations and assets in the US, Canada, Mexico, Peru, and a range of other countries and ranks 3rd on our lists of the best gold and silver stocks to buy amid rising inflation.
By the end of the first quarter of 2021, 43 hedge funds out of the 866 tracked by Insider Monkey held stakes in Newmont Corporation (NYSE: NEM). The total value of their stakes was roughly $994 million. This is compared to 50 hedge funds out of 887 in the previous quarter holding stakes valued at about $1.21 billion.
2. Barrick Gold Corporation (NYSE: GOLD)
Number of Hedge Fund Holders: 49
Barrick Gold Corporation (NYSE: GOLD) is a company working to explore, produce, and sell gold and copper properties, while also working in mine development. The company has ownership interests in producing gold mines located in Argentina, Canada, Mali, the US, and a range of other countries. The company ranks 2nd on our list of the best gold and silver stocks to buy amid rising inflation.
In the first quarter of 2021, Barrick Gold Corporation (NYSE: GOLD) had EPS valued at $0.29, beating the $0.27 estimates, alongside revenue valued at $2.96 billion, a 24.02% growth year over year. The company also has a gross profit margin of 42.66%.
By the end of the first quarter of 2021, 49 hedge funds out of the 866 tracked by Insider Monkey held stakes in Barrick Gold Corporation (NYSE: GOLD). The total value of their stakes was roughly $1.31 billion. This is compared to 53 hedge funds out of 887 in the previous quarter holding stakes valued at about $1.75 billion.
1. Freeport-McMoRan Inc. (NYSE: FCX)
Number of Hedge Fund Holders: 68
Freeport-McMoRan Inc. (NYSE: FCX) is a mining company operating in North and South America, and Indonesia. The company mainly explores copper, gold, silver, and molybdenum, as well as oil and gas. Assets owned by the company include the Grasberg minerals district in Indonesia, Safford and Sierrita in Arizona, and Tyrone in New Mexico, among others. The company ranks 1st on our list of the best gold and silver stocks to buy amid rising inflation.
For the first quarter of 2021, Freeport-McMoRan Inc. (NYSE: FCX) had an EPS valued at $0.51 in line with estimates for the quarter. The revenue for Q1 was valued at $4.85 billion, representing a 21.2% growth year over year. The company also has a gross profit margin of 38.68% and a forward PE ratio of 12.39. The stock has gained 47.55% in the past 6 months and 31.83% year to date.
By the end of the first quarter of 2021, 68 hedge funds out of the 866 tracked by Insider Monkey held stakes in Freeport-McMoRan Inc. (NYSE: FCX). The total value of their stakes was roughly $3.29 billion. This is compared to 61 hedge funds out of 887 in the previous quarter holding stakes valued at about $2.66 billion.
You can also take a look at 10 Best Junior Gold Mining Stocks To Buy and 10 Best Precious Metals Stocks To Buy.
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Disclosure: None. 10 Best Gold and Silver Stocks to Buy Amid Rising Inflation was originally published on Insider Monkey.
