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The Zacks Analyst Blog Highlights: Franco-Nevada, Kirkland Lake Gold, Agnico Eagle Mines, Kinross Gold and Sandstorm Gold

Zacks Equity Research

For Immediate Release

Chicago, IL – November 14, 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: Franco-Nevada Corp. FNV, Kirkland Lake Gold Ltd. KL, Agnico Eagle Mines Ltd. AEM, Kinross Gold Corp. KGC and Sandstorm Gold Ltd. SAND.

Here are highlights from Wednesday’s Analyst Blog:

Recent Softness in Gold Prices a Good Entry Point: 5 Picks

Gold prices moved downward for nearly one and half months after witnessing an impressive rally during the June-September period. The Wall Street rally and a stronger dollar are the primary reasons for the gold price decline.

On Nov 12, gold price for December futures on Comex dropped $3.4 or 0.2% to settle at $1,453.70 per announce. This marked the four straight session of price decline and the lowest settlement for an active contract since Aug 1.

However, recent softness in gold prices may be a good entry point. Trade-related conflict between the United States and China is far from being completely settled. Meanwhile, a slowing pace of U.S. economic growth and global economic downturn are near-term concerns.

Trade Tussle Continues

On Nov 12, President Donald Trump delivered a speech at the Economic Club of New York, where he said a U.S.-China trade deal “could happen soon,” and added that a phase one agreement is “close.” The partial trade deal was scheduled to be signed by both sides in mid-November. However, it has already been postponed to next month.

At the same time, he threatened more tariff hikes on Chinese imports if the trade negotiation fails to produce an interim agreement. Trump has categorically mentioned that he would only accept the interim trade deal if the agreement worked to the advantage of U.S. workers and businesses.

In a strong statement, he said “since China’s entrance into the World Trade Organization in 2001, no one has manipulated better or taken advantage of the United States more.” “I will not say the word ‘cheated,’ but nobody’s cheated better than China, I will say that.”

On Nov 8, President Donald Trump told reports that he hasn’t agreed so far to roll back the  existing tariffs in phases that his administration imposed on Chinese goods over the past one and half years. Moreover, senior U.S. Trade Advisor Peter Navarro said that no formal agreement has taken place between the United States and China to remove tariffs on each other goods.  

Global Economic Downturn

On Oct 15, The International Monetary Fund (IMF) reduced its 2019 and 2020 growth forecasts for the global economy. It predicts growth of 3% for 2019, down from its previous forecast of 3.2%. For 2020, the IMF projects growth of 3.4%, lower than its previous projection of 3.6%. Moreover, the World Bank also squeezed its global growth forecast for 2019 to 2.6% from the previously forecast 2.7% growth.  

On Sep 19, the Organization of Economic Co-Operation and Development (OECD), projected that the world economy will grow just 2.9% in 2019, the lowest forecast since 2009. The OECD had forecast 4% global growth in 2019 just 18 months ago.

Notably, China’s third-quarter 2019 GDP growth came in at 6%, the lowest in 27 and half years. Several large economies of Eurozone, Japan and certain emerging markets are also suffering from lower export demand due to the prolonged trade conflict between the two largest trading countries of the world. The growth rate of U.S. GDP also declined serially in the first three quarters of 2019.

Our Top Picks

At this stage, it will be prudent to invest in gold stocks with strong growth potential. We have narrowed down our search to five such stocks, which have skyrocketed year to date and still have upside left. Each of these stocks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Franco-Nevada Corp.is a gold-focused royalty and stream company with additional interests in platinum group metals and other resource assets. The company has an expected earnings growth rate of 39.3% for the current year. The Zacks Consensus Estimate for the current year has improved by 3.2% over the last 30 days. The Zacks Rank #1 stock has surged 39.5% year to date.

Kirkland Lake Gold Ltd.is engaged in the provision of mining and mineral exploration. It focuses on gold assets primarily in Canada and Australia. The company has an expected earnings growth rate of 96.3% for the current year. The Zacks Consensus Estimate for the current year has improved by 14.6% over the last 30 days. The Zacks Rank #1 stock has jumped 75.9% year to date.

Agnico Eagle Mines Ltd.is engaged in the exploration, development and production of mineral properties in Canada, Mexico and Finland. It primarily produces and sells gold deposit, as well as explores for silver, zinc, and copper deposits. The company has an expected earnings growth rate of 168.6% for the current year. The Zacks Consensus Estimate for the current year has improved by 17.1% over the last 30 days. The Zacks Rank #1 stock has soared 43.8% year to date.

Kinross Gold Corp.is engaged in the acquisition, exploration and development of gold properties in the United States, the Russian Federation, Brazil, Chile, Ghana and Mauritania. The company has an expected earnings growth rate of 210% for the current year. The Zacks Consensus Estimate for the current year has improved by 14.8% over the last 30 days. The Zacks Rank #2 stock has climbed 32.4% year to date.

Sandstorm Gold Ltd.is focused on completing gold purchase agreements with gold mining companies that have advanced stage development projects or operating mines. The company has an expected earnings growth rate of 166.7% for the current year. The Zacks Consensus Estimate for the current year has improved by 33.3% over the last 30 days. The Zacks Rank #2 stock has soared 43.3% year to date.

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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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Kinross Gold Corporation (KGC) : Free Stock Analysis Report
Franco-Nevada Corporation (FNV) : Free Stock Analysis Report
Agnico Eagle Mines Limited (AEM) : Free Stock Analysis Report
Sandstorm Gold Ltd (SAND) : Free Stock Analysis Report
Kirkland Lake Gold Ltd. (KL) : Free Stock Analysis Report
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