Gold Rally Continues: 3 Top Ranked Mining Stocks to Buy Now
The ongoing bull market in gold is increasingly noteworthy, yet intriguing is the fact that it has not garnered the level of attention one might expect from the investment community. Instead of widespread enthusiasm, a notable contingent of traders is vocal about concerns regarding a possible sharp reversal. Nevertheless, for those immersed in commodities, the overarching narrative remains clear: gold prices have shown a remarkable upward trajectory over the past couple of years, outpacing the S&P 500 with an impressive nearly 60% return. With significant geopolitical uncertainties and global central banks augmenting their gold reserves, the intrinsic value and appeal of gold as a hedge continue to resonate deeply within the investment landscape.
For investors aiming to capitalize on the ongoing rally in gold, mining stocks present a compelling opportunity. This article scrutinizes three top-rated mining stocks—Idaho Strategic Resources (IDR), Barrick Gold (GOLD), and Iamgold (IAG)—which are positioned favorably to benefit from the continued ascent in gold prices.
Idaho Strategic Resources: Momentum and Earnings Growth
Idaho Strategic Resources has emerged triumphantly in the small-cap mining arena, with its stock skyrocketing by an astonishing 135% year-to-date. Compellingly, the company has experienced a remarkable surge in earnings revisions—fiscal year 2024 earnings estimates have surged by 167% in just the last couple of months. This data reflects analysts’ optimistic outlook regarding the company’s growth trajectory.
Long-term performance is equally impressive, as the company’s stock price has appreciated by 550% over the past five years. Despite this substantial rise, Idaho Strategic Resources maintains an appealing valuation, trading at 20.7x forward earnings. This figure is beneath its five-year median of 27x and marginally higher than the industry average of 18.4x, indicating a favorable combination of growth potential and reasonable valuation for discerning investors.
Barrick Gold: A Leading Player with Strong Fundamentals
One cannot discuss gold mining stocks without mentioning Barrick Gold, a titan in the industry. As a globally diversified entity, Barrick Gold, with its (Strong Buy) rating, provides investors with ample exposure to the gold market while demonstrating a solid financial foundation. Analysts have ramped up earnings estimates for Barrick Gold, with FY24 estimates up by 8.6% and FY25 by 11.1%.
Looking ahead, the annual earnings growth is projected at a formidable 33% over the next three to five years, while maintaining a fair valuation with a forward earnings multiple of 16.1x and an impressive PEG ratio of just 0.5. Furthermore, Barrick’s financial health appears robust, underscored by a cash flow generation capacity and approximately $4 billion in cash reserves. The company has returned roughly $700 million to shareholders through dividends and commenced a $1 billion share repurchase program. Additionally, the company has effectively reduced its debt, evidenced by an improved debt-to-capital ratio that is now below the industry average.
Iamgold: Huge Potential
Iamgold presents an exciting opportunity in the mid-tier gold mining sector, holding operations across North America, South America, and West Africa. The company is recognized for its diverse production portfolio and commitment to sustainable mining practices. One of the highlight developments is its flagship Côté Gold project in Ontario, which stands to emerge as one of North America’s largest gold mines, substantially augmenting Iamgold’s production capacity.
The trajectory of earnings revisions for Iamgold has been particularly encouraging, with FY24 estimates adjusted upward by 45.5% and FY25 by 24.1% over the last two months. Notable sales growth projections are also on the horizon, anticipating a 56.7% increase for FY24 and 20.5% for FY25. Intriguingly, amid these bullish expectations, IAG is trading at a mere 10.9x forward earnings, significantly below the industry average of 18.4x and far under its five-year median of 16.4x, indicating the potential for a lucrative investment at current levels.
The impending Côté Gold project, which is targeting commercial production by early 2025, could further propel Iamgold’s growth trajectory, underscoring the company’s commitment to scaling production in an evolving market.
Conclusion: Should Investors Buy Gold Mining Stocks?
The sustained gold rally illustrates a robust investment thesis, and mining stocks such as Idaho Strategic Resources, Barrick Gold, and Iamgold emerge as distinct opportunities for investors eager to harness this momentum. Gold typically acts as an uncorrelated asset, providing returns that often move independently from conventional stocks and bonds—an essential factor for diversification.
Moreover, in a market characterized by economic uncertainties, currency devaluation, and geopolitical risks, gold serves as a critical asset. The compelling narratives surrounding these mining stocks render them not only a viable investment but a strategic move for those interested in fortifying their portfolios amid volatility.
