We recently published a list of 6 Most Profitable Gold Stocks To Buy Now. In this article, we are going to look at where Kinross Gold Corporation (NYSE:KGC) stands against other most profitable gold stocks to buy now.
Gold futures experienced a significant uptick on December 10, marking the highest close in more than two weeks. This movement was primarily driven by China’s central bank, the People’s Bank of China (PBOC), which resumed gold purchases for the first time in six months, alongside the Chinese government’s commitment to implementing a “moderately loose” monetary policy and a more proactive fiscal stance in the coming year. ETFs tracking as gold, such as the SPDR Gold Trust (GLD), VanEck Vectors Gold Miners ETF (GDX), VanEck Vectors Junior Gold Miners ETF (GDXJ), iShares Gold Trust (IAU), and iShares Silver Trust (SLV), among others, have also seen increased activity in response to the market movements.
The PBOC’s acquisition of approximately five metric tons of gold in November, which is modest compared to previous purchases that sometimes reached 30 tons per month, was a critical factor in the recent gold rally. Analysts at Commerzbank noted that the resumption of gold buying by the PBOC could be a strategic response to the election of Donald Trump, who has threatened to impose tariffs on China. Additionally, the recent dip in gold prices after a series of record highs may have sparked renewed interest in the precious metal. For gold prices to maintain and potentially extend their gains, it is essential that central bank purchases continue in the coming months, Commerzbank analysts emphasized. Another factor supporting the rise in gold prices is the growing expectation among traders that the Federal Reserve will cut U.S. interest rates at its upcoming meeting. According to ActivTrades analyst Ricardo Evangelista, a rate cut would enhance the appeal of non-interest-bearing assets such as gold.
Gold’s Bull Market Expected to Continue
In an interview with CNBC on December 10, Max Layton, Global Head of Commodities Research at Citi, discussed the impressive performance of gold in the current year and its potential outlook for 2025. Layton noted that this year has been exceptionally strong for gold, with a significant bull market that can be observed over a 50-year chart. He expressed confidence that this trend is likely to continue, citing several key factors.
Citi’s analysts have introduced a fundamental physical flows-based framework for gold pricing, which provides insight into the underlying drivers of the bull market. These drivers include substantial investment from central banks and wealthy over-the-counter (OTC) investors, as well as broader investor concerns about high interest rates and high debt levels in the United States. Additionally, investors are using gold as a hedge against the potential medium-term impact of a U.S. economic slowdown, which has been ongoing for the past two and a half years. The labor market has also been slowing down during this period, and real interest rates remain at 15-year highs, further fueling these concerns. Layton emphasized that as long as these economic issues persist, there will be continued investment in gold as a hedge.
Gold has been shining as a robust investment, driven by renewed buying from central banks, and growing expectations of a U.S. Federal Reserve interest rate cut.
Our Methodology
To compile our list of the 6 most profitable gold stocks to buy now, we used Finviz and Yahoo stock screeners to find the companies that are involved in the production, extraction, processing, or sale of gold. We shortlisted companies with a positive 5-year net income compound annual growth rate (CAGR) and a positive net income in the trailing twelve months (TTM) as informed by SeekingAlpha. Then we used Insider Monkey’s Hedge Fund database to rank 6 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Kinross Gold Corporation (NYSE:KGC)
Number of Hedge Fund Investors: 41
5-Year Net Income CAGR: 34.25%
TTM Net Income: $738.6 Million
Kinross Gold Corporation (NYSE:KGC) is a Canadian gold mining giant with operations and projects in the United States, Brazil, Mauritania, Chile, and Russia. The company is known for its responsible mining practices and commitment to sustainability.
Kinross Gold Corporation (NYSE:KGC) is actively developing several key projects that are expected to drive future growth. The Great Bear project in Ontario, Canada, is a prime example. The Preliminary Economic Assessment (PEA) released in September 2024 outlined annual production of approximately 500,000 ounces of gold with an impressive all-in-sustaining cost of around $800 per ounce. Additionally, the company is making progress on the Lobo-Marte project in Chile, which has the potential to become a long-life, low-cost asset with meaningful production. The project’s high heap leach grade and low strip ratio are particularly attractive, and Kinross Gold Corporation (NYSE:KGC) is advancing baseline studies to further evaluate its potential.
Kinross Gold Corporation (NYSE:KGC) is also heavily focused on exploration to expand its resource base and support future growth. At Round Mountain in the United States, the company is advancing Phase X, which has shown promising results with multiple high-grade intercepts and strong widths. The exploration drilling has expanded mineralization in the lower areas of the resource and indicates potential for higher-margin mining. Similarly, at the Curlew Basin, exploration drilling has highlighted areas with good mining widths and strong grades. Furthermore, Kinross Gold Corporation (NYSE:KGC) has been proactive in reducing its debt, repaying $650 million out of a $1 billion term loan in 2024. This debt reduction has significantly strengthened the company’s balance sheet, with net debt to EBITDA decreasing from 1.7 times to 0.5 times as of the end of Q3 2024.
Overall, KGC ranks 2nd on our list of one of the most profitable gold stocks to buy now. While we acknowledge the potential of KGC to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than KGC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.