In this article we take a look at 10 best precious metals stocks to buy now. You can skip our detailed discussion of the precious metals industry and its growth catalysts and go to 5 Best Precious Metals Stocks to Buy Now.
Long-term investors love precious metals stocks. The precious metals group – primarily consisting of gold, silver, platinum, and palladium – has an inherent worth, which makes it a safe-haven asset. Investors flock to gold, a top precious metal, during times of crisis. In August 2020, driven by the coronavirus crisis, gold price surged about 30% and reached the $2000 mark for the first time. However, gold prices are subject to market conditions, interest rates and supply-demand changes. Fitch recently increased its price target for gold to $1600 per ounce from $1,400 per ounce for 2021. However, rising yields and strengthening dollar is causing gold price to recede.
Why Should You Buy Precious Metals Stocks?
But precious metals stocks aren’t only about gold. Silver is another key member which is currently in the spotlight following investors on Reddit joined hands to push the precious metal price to record highs, trying to cause another “short squeeze.” But long-term investors should ignore the fickle market movements that are not backed by fundamental catalysts. Silver remains one of the best precious metals to invest in amid rising demand. Data shows that global silver demand is expected to reach an 8-yer high of 1.025 billion ounces in 2021.
Precious metals aren’t just about jewelry and necklaces. They have immense applications in the industry. Consider platinum as an example, which is used in emissions-scrubbing catalytic converters. Platinum suffered in 2020, but its prices are set to rebound as economic activity comes back all over the world. Platinum is also used in manufacturing of fertilizer ingredients, silicones, hard disks, glass products, dental equipment and home appliances.
Another key catalyst for precious metals stocks in 2021 and beyond is copper, whose demand is rising as consumers load up on items like washing machines, freezers and cars. One of the biggest drivers of copper demand is China’s relentless economic activity. A report shows that the country’s “Made in China” plan will boost copper demand by 232,000 tonnes by 2025.
Copyright: tomas1111 / 123RF Stock Photo
Palladium is another promising precious metal with huge growth opportunities. The metal has several applications in dentistry, electronics, energy markets and jewelry. Here is what Deloitte said in a report about the precious metal and its outlook:
Scarcely believable a few years ago, palladium is now a more valuable commodity than gold. It has been one of the best performing commodities for the past two years. Europe’s diesel emissions scandal has been hugely beneficial for a commodity whose primarily application is in the exhaust systems of cars. After hitting a 12-month low in August, palladium prices have increased by more than 70% since then.
Safe-haven stocks have seen their importance jump as volatility grows. Even the smart money is struggling keeping up with the changing market trends. 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 88 percentage points since March 2017. Between March 2017 and February 5th 2021 our monthly newsletter’s stock picks returned 187.5%, vs. 75.8% for the SPY. Our stock picks outperformed the market by more than 111 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 16. 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.
Let’s start our list of the 10 best precious metals stocks to buy now.
10. Platinum Group Metals Ltd. (NYSE: PLG)
No. of Hedge Fund Holders: 7
Platinum Group Metals Ltd. is a development-stage, exploration company dealing in platinum. Through joint ventures and partnerships the company has operations in South Africa and Canada. Announcing its financial results in January 2020, the company said it plans to advance palladium dominant Waterberg Project located in South Africa. The stock has shown an impressive performance over the last 12 months, gaining 130% in value.
A total of 7 hedge funds tracked by Insider Monkey held stakes in PLG at the end of the fourth quarter compared to the 3 funds at the 3rd quarter.
9. Endeavour Silver Corp. (NYSE: EXK)
No. of Hedge Fund Holders: 10
Endeavour Silver ranks 9th on our list of 10 best precious metals stocks to buy now. The company primarily mines silver from mines in Mexico and Chile. In the fourth quarter, the company posted a non-GAAP EPS of $0.13, beating the Street estimates by $0.07. Revenue in the period jumped a whopping 76% to reach $61.2 million, beating the consensus by $11.22 million. The stock has gained about 260% over the last 12 months.
A total of 10 hedge funds tracked by Insider Monkey at the end of the fourth quarter had EXK shares on their portfolios. Among these hedge funds is Israel Englander’s Millennium Management, with 1.64 million shares worth $8.3 million.
8. First Majestic Silver Corp. (NYSE: AG)
No. of Hedge Fund Holders: 12
First Majestic ranks 8th in our list of 10 best precious metals stocks to buy now. With several silver and gold mines, the company sells its own bullion rounds and bars. In 2020, it produced 11.6 million ounces of silver, meeting the top-end of its guidance, thanks to the strong output of La Encantada and San Dimas mines. Gold production in the period reached 100,081 ounces, narrowly missing the company’s guidance. First Majestic shares have gained 105% over the last 12 months.
A total of 12 hedge funds tracked by Insider Monkey held stakes in the company at the end of the fourth quarter.
7. Eldorado Gold Corporation (NYSE: EGO)
No. of Hedge Fund Holders: 14
Eldorado Gold owns gold mines in Turkey and Greece and Canada. In 2020, the company’s gold production came in at 528,874 ounces, up 34% from production of 395,331 ounces in 2019. In the fourth quarter, the company posted non-GAAP EPS of $0.33, beating the Street’s estimates by $0.01. Revenue in the period jumped 45% but still missed the consensus estimates.
As of the end of the fourth quarter of 2020, 14 hedge funds tracked by Insider Monkey were long EGO, down from 15 funds a quarter earlier.
6. Coeur Mining, Inc. (NYSE: CDE)
No. of Hedge Fund Holders: 17
Coeur mines gold and silver in Mexico, Bolivia, U.S. and Argentina. The company recently said it plans to offer $350 million of senior notes due 2029. The company missed analysts’ forecasts for the fourth quarter, posting EPS of $0.08 over $228.3 million revenue. The stock is up 92% over the last 12 months.
Overall, 17 hedge funds tracked by Insider Monkey held stakes in CDE at the end of December 2020.
5. B2Gold Corp. (NYSE: BTG)
No. of Hedge Fund Holders: 22
B2Gold Corporation ranks 5th in our list of 10 best precious metals stocks to buy now. The company has mining operations in the Philippines, Mali and Namibia. In full-year 2020, the company said its consolidated output from three operating mines jumped 17%, driven by output from its mines in Mali. In the fourth quarter, the company’s adjusted EPS came in at $0.14, beating the Street’s forecasts by $0.01. Revenue in the quarter jumped over 50%.
A total of 22 hedge funds tracked by Insider Monkey were bullish BTG at the end of the December quarter, up from 17 funds a quarter earlier.
4. Wheaton Precious Metals Corp. (NYSE: WPM)
No. of Hedge Fund Holders: 34
Canada-based Wheaton Precious Metals is one of the best precious metals stocks to buy now, with operations dealing in molybdenum, gold, silver and palladium. The company has 19 operating mines and 9 development stage projects. The company recently said it expects about 2% increase in its fiscal 2021 gold production, while a 1.5% growth is expected in silver production. The stock is up about 40% since the start of the year.
First Eagle Investment Management is one of the 34 hedge funds tracked by Insider Monkey having stakes in WPM at the end of the fourth quarter. The fund owns over 16.2 million shares of the company.
3.Kinross Gold Corporation (NYSE: KGC)
No. of Hedge Fund Holders: 36
Ranking 3rd on our list of 10 best precious metals stocks to buy now is Canada-based Kinross, which mines silver and gold. The company has about 8 active gold mines in the U.S., Brazil, Ghana, Mauritania and Russia. The company’s performance in the fourth quarter was stronger than expected, amid rising gold prices. Revenue in the quarter jumped 20% to $1.2 billion. The company expects production to stay flat in 2021. The stock is up 16% year to date.
As of the end of the fourth quarter of 2020, 36 hedge funds tracked by Insider Monkey were long 36, up from 29 funds a quarter earlier.
2. Newmont Corporation (NYSE: NEM)
No. of Hedge Fund Holders: 50
Colorado-based Newmont is one of the biggest gold mining companies in the world, with operations in Mexico, Canada, Australia, Ghana, Peru and Argentina. In addition to gold, the company also mines several other precious and essential metals like silver, zinc, lead and copper. In the fourth quarter, the company’s adjusted EPS more than doubled and crushed analysts’ forecasts, thanks to higher prices in the period. Adjusted profit in the period jumped to $856 million, from $410 million in the same quarter a year ago. The stock is up about 10% since the start of the year.
As of the end of the fourth quarter, 50 hedge funds tracked by Insider Monkey held stakes in the company.
In one of their 2020 investor letters, First Eagle Investment Management highlighted a few stocks and Newmont Corp (NYSE:NEM) is one of them. Here is what First Eagle said:
“Given what we view as a high-quality management team and robust balance sheet, Colorado’s Newmont is a prime example of a miner that was prepared to meet the challenges of Covid19. With rigorous protocols already in place, the company has been proactive in managing its mines to protect local communities and infrastructure while at the same time mitigating the pandemic’s impact on its business. In contrast with broad market trends that have companies cutting or suspending dividend payments, Newmont recently increased its quarterly dividend by 79%.”
1. Barrick Gold Corporation (NYSE: GOLD)
No. of Hedge Fund Holders: 53
Canada-based Barrick Gold has mining operations in several countries, including Argentina, Congo, Dominican Republic, United States, Saudi Arabia, , Mali, Papua New Guinea and Tanzania. In 2020, the company’s gold production came in at 4.8 million ounces, while copper production totaled 457 million pounds. The company’s CEO Mark Bristow recently said that Barrick Gold’s possible combination with Arizona-based miner Freeport would “had a lot of logic to it.” The stock recently rallied after the company beat analysts’ estimates for the fourth quarter of 2020. Revenue in the period jumped 14% to $3.3 billion.
As of the end of the fourth quarter, 53 hedge funds in Insider Monkey’s database of 887 funds held stakes in Barrick Gold Corporation, compared to 52 funds in the third quarter. First Eagle Investment Management is the biggest stakeholder in the company, with 26.8 million shares, worth $610.8 million.
In one of their 2020 investor letters, First Eagle Investment Management highlighted a few stocks and Barrick Gold Corp (NYSE:GOLD) is one of them. Here is what First Eagle stated:
“Barrick Gold has continued to execute through the challenges posed by the pandemic, with strong production results and low costs driving improved free cash flow reported for first quarter 2020. Barrick has drawn on previous management experience with Ebola outbreaks in Africa to formulate a plan to promote the safety of its employees and communities in the face of Covid19. The company has maintained its annual production guidance for 2020 with only a slight downward adjustment, due to a lease dispute with the government of Papua New Guinea. We believe the company’s prudent management team and strong and diversified asset base position it well to manage through the current trying environment.”
You can also take a peek at Top 10 Car Company Stocks to Invest In and Ray Dalio’s Top 10 Stock Picks for 2021.
Follow Insider Monkey on Twitter
Suggested articles:
- 10 Best Manufacturing Stocks To Buy Now
- 10 Best Material Dividend Stocks To Buy Now
- 10 Best New Stocks To Buy Now
Disclosure: None. 10 Best Precious Metals Stocks To Buy Now is originally published on Insider Monkey.
