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Zacks Value Trader Highlights: Barrick Gold, Newmont Corp, B2Gold, GDX and GDXJ

Zacks Equity Research
·5 min read

For Immediate Release

Chicago, IL – November 13, 2020 – Zacks Value Trader is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here:

Should Value Investors Buy Gold Miner Stocks?

Welcome to Episode #213 of the Value Investor Podcast

Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.

She’s been getting questions from listeners about the gold miner stocks.

Remember them?

They last soared in 2011 on the Eurozone crisis and worries about a US credit downgrade as well as fights over the budget.

But since then, it’s been tough to be a gold bug.

Until 2020.

Gold Hits a Record High in 2020

On the back of the pandemic and trillion-dollar stimulus packages, gold has seen a steady rise to new all-time highs above $2000 an ounce.

It has since pulled back to the $1800s but it’s still higher than a year ago.

The gold miners have been able to cash in on the record high gold prices with record quarters, including soaring cash flows.

Buffett Bought a Gold Miner in 2020

Even the world’s most famous value investor has noticed the solid fundamentals in the gold industry.

In the second quarter, Warren Buffett’s Berkshire Hathaway added gold miner Barrick Gold.

It’s just a 0.27% position in the portfolio, but it’s a sign that there is value in the industry.

And Buffett loves companies with great cash flow. Right now, there aren’t many better than the gold miners.

How to Invest in the Gold Miners

1.       You can follow Buffett into Barrick Gold GOLD. It’s a Zacks Rank #2 (Buy) stock as earnings are expected to jump 111% this year and another 30% next year. Additionally, in the third quarter it had a record free cash flow of $1.3 billion. The result was that it raised the dividend 12.5% to $0.09 a share. That’s a yield of 1.4%.

2.       Newmont Corp. NEM is another big cap miner with global operations that has a great Zacks Rank. It’s currently a #1 (Strong Buy) as 2020 earnings are expected to jump 101% and another 79% next year. The third quarter was the best quarterly performance in the company’s history.

3.       B2Gold BTG is a smaller miner with a $6.2 billion market cap and mines in Mali, Namibia, and the Philippines. In the third quarter, gold revenue was a new quarterly record. Full year projected cash flow is expected to be over $900 million. It’s net cash positive and debt-free as of the Q3. It’s cheap, with a forward P/E of just 12.5.

4.       Why not buy the whole industry? VanEck Vectors Gold Miner ETF GDX is the industry leader. VanEck commenced this ETF all the way back in 2006. It has $16 billion in assets. The ETF has 52 holdings. You’ll get Newmont and Barrick in the ETF as they are the two biggest positions. Year-to-date, GDX has gained 28%.

5.       If you’re looking to invest in the junior miners, VanEck launched the Junior Gold Miners ETF GDXJ in 2009. It has 83 holdings and it includes both gold and silver miners, including B2Gold. Year-to-date, the ETF is up 25.9%.  

What else do you need to know about investing in the gold miners?

Tune into this week’s podcast to find out.

[In full disclosure, Tracey owns shares of BTG in her personal portfolio.]

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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
 
Newmont Corporation (NEM) : Free Stock Analysis Report
 
Barrick Gold Corporation (GOLD) : Free Stock Analysis Report
 
B2Gold Corp (BTG) : Free Stock Analysis Report
 
VanEck Vectors Gold Miners ETF (GDX): ETF Research Reports
 
VanEck Vectors Junior Gold Miners ETF (GDXJ): ETF Research Reports
 
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