Is It Time To Buy Gold Stocks Now? 3 Names To Think About

gold stocks

Gold stock (NYSE:GOLD) reached its highest price this year in March after Russia invaded Ukraine when it soared to $2,052. Gold has not traded at that level since August of 2020; however, since then, it has dropped and is currently trading at $1,662. Despite the precious metal price decline over the previous six months, gold miners and commodities dealers remain upbeat about it and view it as a wise investment.

Typically, gold (NYSE:GOLD) is employed as a hedge, a safe investment that will keep its value regardless of how the economy performs. The supports are in place to maintain the price of gold, with inflation at an all-time high and concerns about a severe recession soon mounting. The Federal Reserve’s efforts to combat inflation by raising interest rates have made the currency stronger and placed downward pressure on gold. Which group of elements will be more important moving forward is the question.

Gold Stocks Performance

The gold stocks in this industry have underperformed so far this year, but according to RBC analyst Josh Wolfson’s notes on the recent Americas Gold Forum, which brought together gold producers and royalty companies, “investor and company moods were generally constructive and seeking out upcoming positive inflection points.” Interim increased market volatility and tightening monetary policy by the central bank were seen as a sign of future economic dangers and a need for safe-haven investments.

We may examine three gold stocks in more detail, especially in light of the notion of future “safe haven” demand. These three stocks have the support of several experts. To ascertain the opinion of the Street as a whole, we put them through the TipRanks database. Here are some specifics.

Gold Sandstorm (SAND)

In the gold industry, royalty company Sandstorm Gold will be our first stop. Instead of actively engaging in mining operations, Sandstorm fronts funds to miners and earns royalty from the sales generated by their work. Sandstorm now has 39 producing properties in its investment portfolio and is receiving more than 250 royalties.

An initial investment in a firm like a Sandstorm is comparatively minimal risk for market investors wishing to go into gold. Investors are somewhat protected by Sandstorm’s diverse portfolio in the event that one or two mining assets don’t perform as expected, and Sandstorm itself performs due diligence in the process of fronting funds to reduce risks.

This makes this stock an easy way for investors to access the gold markets. In the most recent 2Q22 report, Sandstorm reported company-record sales of $36 million, up 36% from the prior year. Based on 19,276 attributable gold equivalent ounces in the quarter, or the production from which Sandstorm receives royalties, this was calculated. Another corporate record, net income for the quarter, was $39.7 million.

Heiko Ihle, a mining analyst who covers this gold royalty company for H.C. Wainwright, mentions the company’s updated forecast, which puts it in a strong position going forward. According to what he says, Sandstorm has increased its 2022 production projection from 65,000 to 70,000 GEOs to 80,000 to 85,000 GEOs in light of the recently completed Nomad purchase. In addition, the business increased its long-term target from 100,000 to 155,000 attributable GEOs by 2025. According to our assessment, Sandstorm has effectively completed a number of transformational acquisitions that could provide positive outcomes going forward. We think Sandstorm is still in a good place to see long-term organic development.

Ihle rates the company as a Buy moving ahead from this view, with a price objective of $13.25, suggesting potential for a significant 156% upside in the coming 12 months.

Ihle is by no means the lone bull here; 6 of the last seven analyst reports on these shares are favorable, resulting in a 6 to 1 ratio of Buy to Hold and a consensus recommendation of Strong Buy. The average price prediction of $9.21 suggests a 78% one-year gain for the company, which is now trading at $5.17.


We’ll turn our attention from royalties to miners now. AngloGold Ashanti, a multibillion-dollar mid-cap company with operations on four continents, including Africa, Australia, and North and South America, is a significant participant in the global gold mining industry. Last year, the corporation produced 2.472 million ounces of gold along with significant byproducts such as sulfuric acid, silver, and copper. The known reserves of AngloGold Ashanti are 123.2 million ounces of gold and a 29.8 million ounce ore reserve.

AU published its financial results for the first half of 2022 this past August. In the first half of the year, the business produced 1.233 million ounces overall, a 3% year-over-year gain. Production increased 10% in the second quarter compared to the first quarter, signaling an increase in gold output. According to the business, higher-grade ore processed at the Australian and Latin American operations, which helped offset reduced production at several African mines, were the main contributors to the production rise. In contrast to the first half of 2021’s negative $25 million cash flow, free cash flow came in at $471 million. As of June 30, the business had $2.6 billion in liquid assets, including $1.3 billion in cash.

A 29-cent dividend per ordinary share was issued by AngloGold and distributed last month. The dividend yields 8.3% at an annualized rate of $1.16 per common share. For the last two declarations, the corporation has increased the dividend payout.

In a recent note on AU, JPM analyst Dominic O’Kane stated of the stock: “AngloGold is one of the largest gold corporations in the world. Geographically diversified, it now derives 100% of the output from Australia, Africa, and South America, all of which have lower-cost assets. According to EV/EBITDA measures, AngloGold is among the most affordable listed gold firms globally, which, in our opinion, unfairly reflects a discount related to its South African listing and domicile. It is selling at a discount to both its international rivals and its historical average historical traded multiple of about 5x (+1 year).

O’Kane grades the shares as Overweight in light of this, and his price objective of $21.60 indicates a potential upside of 56% in the coming year.

Two of the three most recent analyst reports are to Buy, compared to one to Hold, giving the shares a Moderate Buy consensus recommendation. The average price prediction of $20.70 suggests a gain of 49% in the following year for the company, which is now trading at $13.82.

Mine SSR, Inc. (SSRM)

The last company on our list is SSR Mining, another gold miner with a mid-cap. The business operates in the Americas and Asia, as well as in Turkey, Saskatchewan, Nevada, and Argentina, and it has development projects in Mexico and Peru.

More than 794,000 gold-equivalent ounces of total output were produced by SSR last year, translating to more than $1.33 billion in total income. SSR reported quarterly production of 159,262 ounces in its most recent financial report for 2Q22, from which it generated $319.58 million in total sales. Despite a 15% decline in sales from the prior quarter, the amount nonetheless exceeded Wall Street expectations by $27 million. Similarly, adj. EPS of $0.30 topped the Street’s forecast of $0.21.

SSR reported an operating cash flow of $95 million for the whole first half of 2022, with a free cash flow of $18.7 million. At the conclusion of the second quarter, the business had $938.6 million in cash on hand after completing all required debt payments. In order to fulfill its obligations, SSR increased its dividend from 6 cents per common share to 7 cents per share. The 28-cent annualized rate yields a yield of 1.9%, which is about average when compared to dividend payers in the broader markets. The dividend was increased twice in the past year.

The Turkish öpler mine’s closure pending a regulatory investigation by the Turkish government was one of the reasons for the company’s recent inferior performance when compared to the corresponding quarter last year. With regulatory consent, the business resumed this mine on September 22 and anticipated swiftly returning to normal operations. SSR updated all maintenance throughout the mine’s closure.

Ryan Thompson of BMO Capital presents the positive case for SSRM, writing, “Q2 results outperformed forecasts, mostly as a consequence of gold sales surpassing production by 11koz… The company’s share repurchase program saw activity in Q2 and has increased after the conclusion of the quarter. .. SSR has a track record of effective execution and a balance sheet that is best in class. The company’s dividend and share buyback initiatives are supported by FCF.


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About the author: Valerie Ablang is a freelance writer with a background in scientific research and an interest in stock market analysis. She previously worked as an article writer for various industrial niches. Aside from being a writer, she is also a professional chemist, wife, and mother to her son. She loves to spend her free time watching movies and learning creative design.