Home 2020 3 Top Gold Miners, All Strong Buys

3 Top Gold Miners, All Strong Buys



In times of high volatility, precious metals see increased purchases as investors seek a safe-haven.

Gold is the tradition safe-play, the place where savvy investors can put their money and watch it hold its value.

With gold in a long term uptrend, stock investors are buying in to and they are doing this do this while staying in the stock markets focusing on gold miners which have lagged the physical metal price.

Here we have profiled 3 precious metal mining stocks getting approvals from Wall Street’s Top analysts, enough so to have a ‘Strong Buy‘ rating placed them.

Here is a closer look at the 3, as follows:

Barrick Gold Corporation (NYSE:GOLD) is the world’s 2nd largest gold mining company. Barrick is based in Toronto, taps into Canada’s well-known expertise in mining and resource extraction and channels it into gold and copper mines, with operations in 15 countries. In Y 2019, Barrick saw a 21% Y-Y increase in its gold output, reaching 5.5-M oz, and also mined 432-M lbs of copper out of the ground.

Barrick finished Y 2019 with a solid Quarterly performance. The 17c EPS beat the forecast, while the $2.88-B in quarterly revenue represented 51% Y-Y growth.

Looking Ahead: Analysts project Q-1 Y 2020 EPS at 19c, a sharp contrast to last the year-ago figure of 11c.

Barrick’s strong and stable position in the gold mining industry have attracted Wall Street’s attention.

Deutsche Bank analyst Chris Terry put a Buy rating on the stock, with a 25 price target that suggests an upside of 25%.

Mr Terry stated, “Barrick is one of the largest gold companies globally and we believe the company is well positioned to benefit from a rising gold-price environment, and one of the first companies asset allocators looking for gold exposure will be drawn towards […] We anticipate 10% FCF yield in 2020 on our revised gold forecasts,a very attractive yield, particularly when compared to falling interest rates. In addition we expect the company to continue to progressively increase its dividend over the next few quarters given the strength of its balance sheet.

Also bullish is UBS’ Daniel Major, who wrote of GOLD, “We expect gold prices will remain well supported given low interest rates and negative GDP revisions… We think Barrick’s and the gold price selloff were a function of rebalancing around global stock market moves. We expect Barrick to re-rate higher once the sharp moves in global equity markets begin to stabilize… Barrick will remain shareholder friendly with a focus on dividend growth…”

In line with this optimistic view, Mr. Major upgrades his stance on GOLD, from Neutral to Buy. His price target, set at 22 which was eclipsed Thursday at 22.51 means a recalibration of the outlook, we are Very Bullish Barrick and see the new target above 30/share this year a 28% Northside.

Overall, GOLD shares have a Strong Buy rating from the analyst consensus, based on 6 Buys and 1 Hold rating. The stock sells for the low price of 20.16, and the 22.60 average price target is indicative of a 12% upside potential for the stock this year.

B2Gold Corporation (NYSEAM:BTG) is also a Canada-based gold producer. The company controls 5 mines, with its operations widely dispersed in Africa, Central America, and the Philippines. Success in both attracting investors and resource exploration have allowed the company to expand in recent years, and pushed BTG shares to a 37.5% gainer in Y 2019.

B2Gold had a solid finish to Y 2019. In Q-4, the company produced 980,219 oz of gold, beating the high end of its own forward guidance and generating $1.15-B in revenue. That Top-line number represented 10% Y-Y growth.

Looking Ahead: the company has guided toward just over 1-M oz of gold production for Y 2020, and stands by that even in the current climate. For now, B2Gold is able to maintain production at all 5 of its active sites despite the COVID-19 pandemic.

Analyst Ovais Habib, covering B2Gold for Scotiabank, sees reason for optimism in this stock. He maintains his Buy rating along with a price target of 4.40. This implies a substantial 21% Northside potential for the shares in Y 2020.

Backing his Bullish stance on B2Gold, Mr. Habib says, “BTO continues gold production and gold shipments and the company benefits from ample onsite stockpiles and high levels of onsite supplies/spares/consumables. Financially, BTO remains well positioned with cash of $140-M and $200-M drawn on the $600-M credit facility…”

He adds, summing up B2Gold’s position, “The company remains focused on the organic pipeline… BTO has many promising exploration targets to follow up. Mines continue to run and the company has been taking advantage of lower fuel prices…”

B2Gold has a unanimous Strong Buy analyst consensus rating, with 7 Buys set in recent weeks. Shares are finished at 4.11 Thursday in NY, the average price target at 4.91 implies an impressive upside potential of 25%

Newmont Mining (NYSE:NEM) has a $38-B market cap, it is the world’s largest gold mining company. Newmont had a $1.4-B in free cash flow for Y 2019, produced 6.3-M oz of gold, and controls some 100.2-M oz in recoverable gold mineral reserves. NEM shares managed a net gainer while the broader market slumped.

Looking Ahead: The company guides toward 6.4-M oz of gold production in Y 2020, and sets an annual range of 6.2 to 6.7-M oz annually through Y 2024.

Of additional interest to investors, Newmont made headlines in January when it agreed to a $10-B deal to acquire Goldcorp. The move will create the world’s largest gold producer by output.

Also in the news, Newmont in March closed out a senior note offering which brought in $1-B in funding. The notes are due in Y 2030, and will be used to refinance current debt at lower interest rates; the company is effectively reducing its interest rates from 3.5% and 3.7% down to 2.25%.

Raymond James analyst Brian MacArthur provides coverage of this stock. He lowered his price target from 58 to 56, mainly due to concerns over the COVID-19 coronavirus impact on operations, but keeps his Buy rating on the shares. His new price target was hit and went beyond and will be recalibrated shortly.

Mr. MacArthur writes, “the company expects that some production could be deferred into 2021, potentially impacting costs in 2020 if some operations are on care and maintenance for an extended period… Newmont is not currently experiencing significant delays in the shipping of concentrate or transportation and refining of ore, but expects that delays may occur in the coming days and weeks if certain government-required shutdowns and border restrictions occur.”

All in all, Newmont’s Strong Buy analyst consensus rating is based on 7 Buys and 2 Holds from recent calls. The stock is selling at 57.31, and it now beyond it 56.57 consensus price target is soon to be recalibrated to well over $65/share, we are Very Bullish NEM, it has strong deep support and no overhead resistance in here.

To find good ideas for stocks trading at attractive valuations, visit our All Buys Archive at HeffX-LTN.

Have a happy healthy Easter and Passover weekend, stay home, Keep the Faith!

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S. Jack Heffernan Ph.D. Economist at Knightsbridge holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Crypto, Mining, Shipping, Technology and Financial Services.