Investors in precious metals and mining stocks have had a tough year. While the metals have improved a bit in recent weeks, gold and silver have both declined over the past year as investors focused more on deflation than the possibility of inflation — which traditionally has created demand for gold and gold mining stocks. Investors and traders who have tried to bottom-fish the precious metals miners have so far been met with nothing but disappointment. When I look at the sector using our stock picking tool Portfolio Grader, I see that the majority of these issues are still rated “Sell” or “Strong Sell.” But a couple of the miners seem to be perking up of late and earning much better grades — they might be worth consideration as candidates to play a rebound in gold and mining.
Sibaneye Gold (SBGL) owns both surface and underground gold mines in South Africa. While the stock can still feel the effect of lower gold prices, analysts are looking for earnings to explode in 2015 — and recent performance has been better than many of its competitors. Since being spun off from Gold Fields (GFI), Sibaneye has acquired other mines and is looking to continue to expand its operations. The gradual improvement and increased potential of this producer of gold was picked up by Portfolio Grader back in April and the stock was upgraded to an “A.” Shares of Sibaneye remain a “Strong Buy” at the current price.
Franco-Nevada (FNV) is a gold mining royalty company that is performing well of late. The company provides money up front to develop mines and then receives the right to buy the metal produced at a set price or a %age of the production. Franco Nevada has streaming and royalty interest in platinum mines as well as some oil and gas assets. The company had a solid first quarter with increased production and management announced they were raising the dividend by 11%. The fundamental improvements have been noticed by Portfolio Grader and this month the stock is being upgraded to a “B” — FNV is a “Buy” at the current price.
Agnico-Eagle Mines (AEM) has gold mining operations in Canada, Finland and Mexico. Wall Street has been very pessimistic about the gold mining industry, and Agnico-Eagle has been vastly exceeding those expectations. In fact the company has now posted three consecutive huge positive earnings surprises and analysts have been scrambling to raise their earnings estimate of both 2014 and 2015. The excellent performance of the company was recognized by Portfolio Grader; in May the stock was upgraded to a “B.” Shares of Agnico-Eagle Mines are a buy at the current price.
Bottom-fishing an industry can be a daunting task. Portfolio Grader can make it easier and more profitable by helping you find the very best stocks in a depressed sector. These three stocks have strong fundamentals and quantitative characteristics that can help them lead a recovery in gold mining stocks.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth,Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
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