In this article, we discuss the 10 best gold stocks to buy right now.
Gold has been one of the best performing assets of 2020 due to risky equity markets, low interest rates, and a positive price momentum. According to a report from the World Gold Council, the price of gold hit a historic high of $2,067.15 per oz in August last year, leading to a chain effect that improved the performance of gold in other major currencies as well. However, as interest rates rose this year the price of gold dropped by more than 6% in the first half of 2021, underperforming in most major currencies.
Inflation concerns and upbeat investor sentiment have offset some of the interest-rate related worries around gold in recent months, pushing prices higher once again. Currency risks and capital preservation also played their part in boosting the gold market. A recent study by Research and Market highlights that the global gold mining market is expected to be worth more than $249 billion by 2026, growing at a compound annual growth rate of 3% in the next five years. In a volatile stock market, gold may be a safe bet.
Investors who want exposure to gold investments should check out some of the best stocks in the sector. Some of the top gold stocks to buy right now include Newmont Corporation (NYSE:NEM), Barrick Gold Corporation (NYSE:GOLD), and Wheaton Precious Metals Corp. (NYSE:WPM), among others discussed in detail below.
Our Methodology
Here is our list of the 10 best gold stocks to buy right now. These were picked based on their basic business fundamentals, analyst ratings, and hedge fund sentiment.
The hedge fund sentiment around each stock was gauged using the data of 873 hedge funds tracked by Insider Monkey.
Why pay attention to hedge fund holdings? 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 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). 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.
Best Gold Stocks To Buy Right Now
10. Gold Fields Limited (NYSE:GFI)
Number of Hedge Fund Holders: 17
Gold Fields Limited (NYSE:GFI) had posted earnings for the first half of the year in August, reporting earnings per share of $0.49, beating predictions by $0.02. The revenue over the period was close to $2 billion, up over 2% year-on-year. The company also updated guidance for the full year as it posted earnings, saying it expected attributable equivalent gold production of up to 2.350Moz in 2021.
RBC Capital analyst Josh Wolfson recently upgraded Gold Fields Limited (NYSE:GFI) stock to Outperform from Sector Perform and raised the price target to $11 from $10.50, noting a new project of the firm could double free cash flows by 2023.
Among the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm AQR Capital Management is a leading shareholder in Gold Fields Limited (NYSE:GFI) with 6.4 million shares worth more than $57 million.
Just like Newmont Corporation (NYSE:NEM), Barrick Gold Corporation (NYSE:GOLD), and Wheaton Precious Metals Corp. (NYSE:WPM), Gold Fields Limited (NYSE:GFI) is one of the stocks attracting the attention of elite investors.
9. Hecla Mining Company (NYSE:HL)
Number of Hedge Fund Holders: 20
Roth Capital analyst Joe Reagor recently resumed coverage of Hecla Mining Company (NYSE:HL) stock with a Buy rating and a price target of $7.50, noting that the firm continued to provide significant leverage to precious metals prices. Although the stock has pulled back in recent weeks on the back of a 24% drop in quarterly silver production, the company has strong fundamentals and is expected to bounce back from the temporary setback.
In earnings results for the second quarter, posted on August 5, Hecla Mining Company (NYSE:HL) reported earnings per share of $0.06, beating predictions by $0.01. The revenue over the period was $217 million, up 31% year-on-year.
At the end of the second quarter of 2021, 20 hedge funds in the database of Insider Monkey held stakes worth $102 million in Hecla Mining Company (NYSE:HL), up from 16 in the preceding quarter worth $39 million.
8. Royal Gold, Inc. (NASDAQ:RGLD)
Number of Hedge Fund Holders: 20
Royal Gold, Inc. (NASDAQ:RGLD) is a Colorado-based firm that acquires and manages business interests related to precious metals. It beat market expectations on earnings per share and revenue in the second quarter. It also declared a quarterly dividend of $0.30 per share that month, in line with previous. The forward yield was 1.09%. In June this year, the firm had signed a purchase agreement with Ero Gold for gold mined from a Brazilian mine.
As part of the deal, Royal Gold, Inc. (NASDAQ:RGLD) paid Ero Gold $100 million in advance payments and pledged to follow up with additional payments of $10 million if the latter met gold production targets in the months ahead.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm First Eagle Investment Management is a leading shareholder in Royal Gold, Inc. (NASDAQ:RGLD) with 3.4 million shares worth more than $390 million.
In its Q1 2021 investor letter, Argosy Investors, an asset management firm, highlighted a few stocks and Royal Gold, Inc. (NASDAQ:RGLD) was one of them. Here is what the fund said:
“Gold royalties business achieve 2 objectives for us: 1) It’s a good business model with strong returns through the gold price cycle; and 2) it provides some protection from inflation, should it materialize due to the increasingly loose fiscal and monetary policy decisions the United States (and other developed market economies) is making.
I don’t want to stay on my soapbox for too long, but this is the first time in history that I’m aware of politicians openly stating that debt levels don’t matter, even in the long term. In 2019, the government spent $4.4 trillion. Of those expenditures, $0.4 trillion was spent making interest payments on existing debt at the time of $16.9 trillion. The interest rate on that debt was 2.4%. Debt for 2021 is projected to increase to $22.5 trillion, and then to $33 trillion by the end of the decade.
I don’t have a crystal ball, but if interest rates increased to previously “normal” levels of only 5%, U.S. interest payments would be over $1.1 billion in 2021, 25% of U.S. total expenditures in 2019. In the event that happens, there are a few choices: 1) run a larger deficit which could lead to accelerating debt levels; 2) reduce government spending on things like the military, Medicare, Social Security, pensions, and other programs; or 3) the government allows or encourages inflation to reduce the value of its debt obligations.
To be clear, this spiraling debt outcome currently seems and likely is not happening within the next several years, but the probability of it occurring is not zero and things have changed rapidly before. For that reason, I think an investment in Royal Gold provides some minor insulation against inflation.”
7. Rio Tinto Group (NYSE:RIO)
Number of Hedge Fund Holders: 21
Rio Tinto Group (NYSE:RIO) is a large firm engaged in mining and mineral processing. It has interests in copper, diamonds, gold, and even uranium. The company recently revealed that it had set aside a whopping $7.5 billion to cut carbon emissions of the firm in half by the end of this decade. By 2025, the firm aims to achieve a 15% reduction in emissions, a full five years ahead of the original schedule. Analysts and activists have reacted positively to the news.
On September 22, investment advisory Oddo BHF upgraded Rio Tinto Group (NYSE:RIO) stock to Neutral from Underperform with a price target of 5,100GBP. Alai William, an analyst at the firm, issued the ratings update.
Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Rio Tinto Group (NYSE:RIO) with 12.9 million shares worth more than $1 billion.
6. Franco-Nevada Corporation (NYSE:FNV)
Number of Hedge Fund Holders: 23
Franco-Nevada Corporation (NYSE:FNV) recently received positive coverage from KeyBanc and Canaccord, with the former initiating the stock at Overweight and the latter upgrading it to Buy from Hold. KeyBanc analyst Adam Josephson cited the consistency with which the firm had increased dividend payouts as one reason behind the bullish outlook. In August, the company had declared a quarterly dividend of $0.30 per share with a forward yield of 0.77%.
Even though Franco-Nevada Corporation (NYSE:FNV) has just one business interest – gold – it has solid fundamentals. It beat market estimates on earnings per share and revenue in the second quarter by $0.02 and $9.8 million respectively.
At the end of the second quarter of 2021, 23 hedge funds in the database of Insider Monkey held stakes worth $959 million in Franco-Nevada Corporation (NYSE:FNV), up from 20 in the preceding quarter worth $933 million.
In addition to Newmont Corporation (NYSE:NEM), Barrick Gold Corporation (NYSE:GOLD), and Wheaton Precious Metals Corp. (NYSE:WPM), Franco-Nevada Corporation (NYSE:FNV) is one of the stocks that hedge funds are buying.
5. Wheaton Precious Metals Corp. (NYSE:WPM)
Number of Hedge Fund Holders: 26
Virus concerns and the falling dollar have pushed the prices of gold to new highs in the past few months. Wheaton Precious Metals Corp. (NYSE:WPM), a mining firm that mostly deals in precious metals, has benefited from this increase in gold prices. As gold hit $1,800/oz in August this year, the firm posted earnings for the second quarter, reporting a revenue of $330 million, up 33% year-on-year and beating predictions by $2.1 million.
KeyBanc analyst Adam Josephson recently initiated coverage of Wheaton Precious Metals Corp. (NYSE:WPM) with an Overweight rating and a price target of $47, noting that the company was the “go to precious metals royalty/streaming” firm among investors.
At the end of the second quarter of 2021, 26 hedge funds in the database of Insider Monkey held stakes worth $471 million in Wheaton Precious Metals Corp. (NYSE:WPM), down from 28 in the previous quarter worth $439 million.
In its Q2 2020 investor letter, First Eagle Investment Management, an asset management firm, highlighted a few stocks and Wheaton Precious Metals Corp. (NYSE:WPM) was one of them. Here is what the fund said:
“The strength in the price of gold was generally supportive of gold-related equities whose performance historically has been leveraged to the gold price. One such example is Wheaton Precious Metals, a Canadian streaming company that maintains, in our view, a high-quality, low-cost portfolio of precious metal purchase agreements that is well diversified across mining partners, geographies and metal types. Despite pandemic-related suspensions of six of its mining assets, Wheaton posted a 50% year-over-year increase in operating cash flow for the first quarter, which allowed the company to reduce its net debt while raising its quarterly dividend payment.”
4. Kinross Gold Corporation (NYSE:KGC)
Number of Hedge Fund Holders: 28
Kinross Gold Corporation (NYSE:KGC) is a Canadian company that engages in the development of gold properties across the world. In July, National Bank analyst Mike Parkin had upgraded the stock to Outperform from Sector Perform with a price target of $11, appreciating the solid second quarter earnings of the firm. The company beat market predictions on earnings per share by $0.01 in the second quarter.
Kinross Gold Corporation (NYSE:KGC) also has an impressive dividend history. In late July this year, the company declared a quarterly dividend of $0.03 per share, in line with previous. The forward yield was 1.92%.
At the end of the second quarter of 2021, 28 hedge funds in the database of Insider Monkey held stakes worth $360 million in Kinross Gold Corporation (NYSE:KGC), up from 27 in the previous quarter worth $444 million.
3. Barrick Gold Corporation (NYSE:GOLD)
Number of Hedge Fund Holders: 47
Barrick Gold Corporation (NYSE:GOLD) is one of the favorite gold stocks among hedge funds. In October, the company announced that it was on track to meet the targets for the year after a strong performance during the third quarter in which sales stood at over 1 million oz of gold while production was around 1.09 million oz. The production between June and September this year was up 5% from the previous quarter.
In late September, KeyBanc analyst Adam Josephson initiated coverage of Barrick Gold Corporation (NYSE:GOLD) stock with a Sector Weight rating, noting that the valuation of the firm seemed “fair” in the present environment.
At the end of the second quarter of 2021, 47 hedge funds in the database of Insider Monkey held stakes worth $1.2 billion in Barrick Gold Corporation (NYSE:GOLD), down from 49 the preceding quarter worth $1.3 billion.
In its Q4 2020 investor letter, GoodHaven Capital Management, an asset management firm, highlighted a few stocks and Barrick Gold Corporation (NYSE:GOLD) was one of them. Here is what the fund said:
“Barrick’s recent results have been consistent with our expectations. Barrick has begun inching up the dividend as planned, which should continue increasing absent them finding a large acquisition (they want more copper assets) or a materially lower price of gold. We’d also expect periodic special dividends during stronger gold price environments. At current gold prices we estimate normalized free cash flow at Barrick of over $1.60/share. The company is now about net-debt free. We see plenty of upside and absent a collapse in gold not too much downside. Missing from much of the public discussions about gold, but potentially interesting, is the supply/demand backdrop. As the Wall Street Journal (8/16/20) recently said “gold is amongst the rarest metals in the earth’s crust and much of the easier to get to ore has already been mined. What is left is harder to find and more expensive to extract…” According to the World Platinum Council, it was forecasted that there will be a supply and demand imbalance of 1.2 million ounces globally. The potential macro tailwinds that could add value to an alternate currency like gold including currency concerns, excessive debt and continuing negative real interest rates are still out there. While the shares performed well for the year they were weak in the second half and now stand more attractively priced.”
2. Newmont Corporation (NYSE:NEM)
Number of Hedge Fund Holders: 55
Newmont Corporation (NYSE:NEM) is a Colorado-based firm that engages in the production and exploration of gold. It has a market cap of more than $43 billion and posted over $11 billion in revenue last year. A regulatory crackdown in China that has hurt growth stocks in the US has resulted in an increase in gold prices, pushing stocks like Newmont higher in recent months. At the end of 2020, the firm had proven and probable gold reserves of 94 million ounces.
On September 24, investment advisory KeyBanc initiated coverage of Newmont Corporation (NYSE:NEM) stock with a Sector Weight rating and no price target. Adam Josephson, an analyst at the advisory, issued the ratings update.
At the end of the second quarter of 2021, 55 hedge funds in the database of Insider Monkey held stakes worth $1.2 billion in Newmont Corporation (NYSE:NEM), up from 43 in the preceding quarter worth $994 million.
In its Q1 2020 investor letter, First Eagle Investment Management, an asset management firm, highlighted a few stocks and Newmont Corporation (NYSE:NEM) was one of them. Here is what the fund said:
“The gold price helped support the stock price of Newmont Corporation, a Colorado-based miner with, in our view, highquality assets located in favorable mining jurisdictions in North America, South America, Australia and Africa. With what we consider an impressive portfolio of assets, strong management team, solid balance sheet and history of generating free cash flow, Newmont appears well positioned to withstand the economic disruptions related to the coronavirus pandemic.”
1. Freeport-McMoRan Inc. (NYSE:FCX)
Number of Hedge Fund Holders: 76
Inflation fears have helped push the prices of mining stocks like Freeport-McMoRan Inc. (NYSE:FCX) higher in the past few months. The company, which operates from Arizona, has significant interests in the gold business. It recently posted earnings for the third quarter, beating market estimates on earnings per share by $0.09. The revenue over the period was $6 billion, up 57% year-on-year.
Bank of America analyst Lawson Winder recently reinstated coverage of Freeport-McMoRan Inc. (NYSE:FCX) stock with a Buy rating and a price target of $30, noting the firm was a “large, liquid, and well-run” offering in the mining sector.
At the end of the second quarter of 2021, 76 hedge funds in the database of Insider Monkey held stakes worth $3.8 billion in Freeport-McMoRan Inc. (NYSE: FCX), up from 68 in the preceding quarter worth $3.2 billion.
You can also take a peek at 10 Penny Stocks Redditors are Buying in August and 10 Best Nickel Stocks to Buy Now.
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Disclosure. None. 10 Best Gold Stocks To Buy Right Now is originally published on Insider Monkey.
