Top Gold Stocks for Q2 2023

Gold prices rose 7% in March as investors flocked to safe havens after the collapse of multiple mid-size banks shook markets. That strength was reflected in some of the precious metal sector's stocks.

Top-performing gold industry stocks heading into the second quarter include Snowlike Gold Inc., Lundin Gold Inc., and Alamos Gold Inc., whose share prices rose in the past year even as the VanEck Gold Miners ETF (GDX), a key sector benchmark, fell 17% and the Russell 1000 Index dropped by 15%.

Here are the top gold stocks in each of three categories: best value, fastest growth, and most price momentum. All data below is as of March 21.

Best Value Gold Stocks

Value investing is a factor-based investing strategy that involves picking stocks that you believe are trading for less than what they are worth, usually by measuring the ratio of the stock's price to one or more fundamental business metrics. A widely accepted value metric is the price-to-earnings (P/E) ratio. Value investors say that if a business is cheap compared with its intrinsic value—in this case, as measured by its P/E ratio—then the stock price may rise faster than that of others as the price comes back in line with the worth of the company.

These are the gold stocks with the lowest 12-month trailing P/E ratio.

• Sibanye Stillwater Ltd.: Sibanye Stillwater is a company that mines and processes precious metals. It is a leading producer of platinum group metals such as palladium, rhodium, and platinum from mines in North America and South Africa. The company also owns other precious metal mines globally.
• Torex Gold Resources Inc.: Torex Gold is an intermediate gold producer that explores, develops, and operates its 100%-owned Morelos Gold Property in the Guerrero Gold Belt in Mexico.
• Victoria Gold Corp.: Victoria is the 100% owner of the Dublin Gulch property in central Yukon, which includes the Eagle Gold Mine, with a reserve of 2.6 million ounces of gold. Victoria Gold also trades over-the-counter (OTC) in the U.S. under the ticker VITFF. On Feb. 22, the company reported fourth-quarter earnings and full-year results; net income fell by 77%, along with declining revenue. The decrease in sales was due to a lower average price for gold and fewer ounces sold in 2022.
• Calibre Mining Corp.: Calibre Mining develops properties with precious metal deposits such as silver, gold, and copper. The company has properties within Central America in the El Limón and La Libertad gold mines.
• Perseus Mining Ltd.: Perseus is an Australian gold mining company focused on properties in Ghana and Côte d’Ivoire. The company produced more than 500,000 ounces of gold in 2022. Shares of Perseus Mining also trade OTC in the U.S. under the ticker PMNXF.

Fastest Growing Gold Stocks

These are the top stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-on-year (YOY) percentage revenue growth and their most recent quarterly YOY earnings per share (EPS) growth.

Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 1,000% were excluded as outliers.

• Sandstorm Gold Ltd.: Sandstorm Gold is a royalty company that provides financing for gold miners in exchange for the right to a percentage of the gold produced from mines. The company has a portfolio of 250 royalties. Sandstorm sold about 82,400 gold equivalent ounces in 2022.
• AngloGold Ashanti Ltd.: AngloGold is a South Africa-based gold mining company. Its largest mine is in Geita, Tanzania, near Lake Victoria. The company also operates mines in Central America, South America, and Australia. On March 16, AngloGold proposed a joint venture with Gold Fields Ltd., a gold producer in South Africa, to combine Gold Fields's Tarkwa Mine and AngloGold's Iduapriem Mine, which are both located near each other in western Ghana.
• Alamos Gold Inc.: Alamos is a gold producer operating three mines in Canada and Mexico, with additional development projects in Canada, Mexico, Turkey, and the U.S.
• Agnico Eagle Mines Ltd.: Agnico Eagle is a Canadian gold mining company whose largest mining operation is in northwestern Quebec. The company also has mining properties in Finland and Mexico. On Feb. 16, Agnico Eagle released 2022 fourth-quarter earnings results. Net income increased by 102% on a 46% advance in revenue.
• B2Gold Corp.: B2Gold is a Canadian gold producer which operates three mines in Mali, the Philippines, and Namibia. B2Gold announced on Feb. 13 its acquisition of the gold mining company Sabina Gold & Silver Corp, giving it access to Sabina's Back River Gold District in Nunavut, Canada.

Gold Stocks with the Most Momentum

Momentum investing is a factor-based investing strategy that involves buying a stock whose price has risen faster than the market as a whole. Momentum investors believe that stocks that have outperformed the market will often continue to do so because the factors that caused them to outperform will not suddenly disappear.

In addition, other investors seeking to benefit from the stock’s outperformance will often purchase it, further bidding its price higher. These are the stocks that had the highest total return over the past 12 months.

• Snowline Gold Corp.: Snowline Gold is a gold exploration company with multiple properties located in the Yukon in northwestern Canada.
• Lundin Gold Inc.: Lundin Gold is a mining company that operates the Fruta del Norte gold mine in southeast Ecuador, a multimillion-ounce, high-grade gold property. The company also has shares that trade OTC in the U.S. under the ticker LUGDF. Lundin reported fourth-quarter earnings on Feb. 23, with a net loss of 68 million. Total revenue grew by 13% year-over-year, reflecting better-than-expected gold production. The quarter's net loss was due to the early repayment of $208 million to a credit facility established to develop the Fruta del Norte mine.
• Alamos Gold Inc.: See company description above.
• Dundee Precious Metals Inc.: Dundee Precious Metals acquires, develops, and processes precious metal properties. The company owns and operates multiple mines in Bulgaria and a specialty smelting operation in Namibia. On Feb. 16, the company declared a first-quarter dividend of 4 cents a share, payable on April 17 to shareholders of record on March 31.
• Torex Gold Resources Inc.: See company description above.

Impact of the U.S. Dollar on Gold Stocks

The U.S. dollar, or greenback, has had a longstanding relationship with gold dating back to the introduction of the gold standard in the 1880s, through which paper money was directly linked to a specific amount of the yellow metal. Although former President Franklin D. Roosevelt removed the gold standard in 1933, the greenback still closely correlates with gold—and subsequently gold stocks—as the metal is priced in U.S. dollars.

Typically, a strong U.S. dollar means weaker gold prices as demand for the precious metal eases from buyers using foreign currencies. Conversely, demand increases when the greenback loses value, making gold cheaper for offshore buyers. Although the U.S. dollar and gold often have an inverse relationship, both can move in the same direction. For example, during periods of global uncertainty, both assets may rise as investors flock to save-haven investments. Due to its finite supply, gold is seen as a hedge against inflation, while the dollar's status as the global reserve currency makes it sought after during times of risk aversion.

Advantages of Holding Gold Stocks in Your Portfolio

Key advantages of holding gold stocks include leveraged upside and liquidity.

Leveraged Upside and Diversification: Buying gold stocks allows investors to effectively make a leveraged bet on gold's price, as miners can increase production and grow their sales when gold rises in value. Because gold stocks closely follow the commodity's price, the sector also provides a partial hedge against inflation, helping to diversify a "risk-on" equity portfolio. 

Gold Discoveries: Large discoveries can significantly increase gold mining stocks' prices, particularly if a junior miner has a small market cap. For instance, Canadian junior explorer Enduro Metals Corp. (ENDMF) announced that it had intersected gold in one of its mines in May 2021. Shares of the small miner more than doubled over the next year.

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