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The Zacks Analyst Blog Highlights: AngloGold, Kinross Gold, Newmont and Sandstorm

Zacks Equity Research

For Immediate Release

Chicago, IL –August 7, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: AngloGold Ashanti Limited AU, Kinross Gold Corporation KGC, Newmont Goldcorp Corporation NEM and Sandstorm Gold Ltd. SAND.

Here are highlights from Tuesday’s Analyst Blog:

Gold Firms on Service Sector Slowdown: 4 Solid Buys

Gold prices scaled to a six-year high as discouraging service sector data diminished chances of a rate hike in the near future. In fact, the apparent slowdown in service activities has raised chances of a rate cut at the September FOMC meeting. Needless to say, the Fed has trimmed rates for the first time in nearly a decade in July.

With almost no chance of a rate hike, yield-bearing assets have lost their appeal, which in turn benefits gold. Given that there is upside potential for gold, investing in stocks that have significant exposure to this metal seems prudent.

U.S. Service Sector Expands at the Slowest Pace in 3 Years

On Aug 5, spot gold gained $24.57, or 1.7%, to $1,465.56, which was almost close to the intraday high of $1,466.33, its most expensive level since May 9, 2013. Prices soared after slowdown in the U.S. service sector, which accounts for a major portion of the economy, reassuring investors that interest rates will remain low for some time now.

According to the Institute of Supply Management (ISM), its non-manufacturing index slowed to a reading of 53.7% in July from June’s 55.1%, the lowest since August 2016. Analysts estimated the reading at 55.5% for July. The business activity index, declined to 53.1% from 58.2% registered in June. The ISM’s new order count also dropped to 54.1% from June’s 55.8%.

The rate of growth in the service sector predominantly cooled off due to tariff concerns. President Trump in a series of tweets recently said that the United States would impose a 10% tariff on $300 billion of Chinese products starting Sep 1.

The President aims to extract trade concessions from China on an array issues, including intellectual property theft and currency manipulation. Beijing, in the meanwhile, is possibly looking to defer a trade deal decision until the U.S. presidential election next year. China has requested its state-owned companies to halt the import of American agricultural commodities.

Low Borrowing Costs: A Boon for Gold

Thanks to the dovish expectations, gold prices scaled north. This is because lower interest rates tend to make bonds and other fixed-income investments less attractive.

Money will flow out of bonds as they can’t provide higher yields, and in turn may flow into gold. It’s worth pointing out though that the yellow metal offers no yield at all.

Top 4 Choices

As gold glitters, gold mining stocks have a fair chance to gain. We have, thus, selected four such stocks that flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy).

AngloGold Ashanti Limitedoperates as a gold mining company. The company has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved up 10.9% over the past 60 days. The company’s expected earnings growth rate for the current year is 111.3% compared with the Mining - Gold industry’s estimated rally of 10.3%.

Kinross Gold Corporationengages in the acquisition, exploration and development of gold properties in the United States. The stock currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has climbed 75% in the past 60 days. The company’s expected earnings growth rate for the current year is 110% compared with the Mining - Gold industry’s projected rally of 10.3%.

Newmont Goldcorp Corporationoperates in the mining industry. The company primarily acquires, develops, explores for, and produces gold, copper, and silver. Its operations and/or assets are located in the United States. The stock currently has a Zacks Rank #2. The Zacks Consensus Estimate for its next-quarter earnings has increased 2.6% in the past 60 days. The company’s expected earnings growth rate for the next year is 56.2% compared with the Mining - Gold industry’s projected rally of 29.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sandstorm Gold Ltd.focuses on acquiring gold and other metal purchase agreements and royalties from companies that have advanced stage development projects or operating mines. The stock currently has a Zacks Rank #2. The Zacks Consensus Estimate for its next-year earnings has advanced 11.1% in the past 60 days. The company’s expected earnings growth rate for the current year is 100% compared with the Mining - Gold industry’s projected rally of 10.3%.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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