SBGL - Best Gold Stocks To Trade As Prices Inch Toward New 2020 High?
Gold Stocks Are Soaring As Metals Prices Reach New Highs
If there’s one thing you can count on when it comes to gold stocks, it’s the fact that many tend to follow the price of gold. In light of this, when gold starts to break out, so do gold stocks in most cases. This month we’ve seen how fears of the economic slowdown in China have impacted global markets. Initially sparked by the coronavirus, China is now taking even more drastic measures and going as far as physically cleaning its money.
The world’s second-largest economy is disinfecting its currency. The World Health Organization is still trying to figure out how long the virus can remain alive on surfaces. Needless to say, the damage is being done and gold stocks are benefiting in a major way. With international companies either slowing production or pulling completely out of China, the ripple effects are noticeable.
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The message from Apple over the weekend wasn’t a bright sign of things to come either. The company said that sales are expected to slump thanks to the impact from China and the virus. Apple said it would miss its forecasts. Furthermore, suppliers including AMS AG and Dialog Semiconductor Plc added to the slide in global markets. So, while this is the case, some of the top gold stocks have taken center stage.
Top Gold Stocks To Watch
While tech continues to drag lower this week, several gold stocks have moved in lockstep with gold prices. Take Barrick Gold stock (GOLD – Free Report) (ABX) for example. As one of the largest gold mining companies in the world, Barrick shares climbed even higher at the start of the short week.
In fact, after opening around $19.85 on Tuesday, shares of Barrick gold stock surged to new 52-week highs of $20.41. Not only that but these were levels that Barrick hadn’t traded at since 2017.
Last week the company reported that it received approvals from the Senegal government to move forward with the sale of its subsidiary’s 90% interest in the Massawa gold project. Teranga Gold is the buyer and through the transaction, the Senegal government will retain 10% of the project. Currently, Raymond James and TD Securities have upped their price targets on the stock. TD moved its $21 target to $22 and Raymond James reiterated its $22 target.
But it hasn’t just been large miners either. Junior gold stocks are feeling the benefits as well. The VanEck Vectors Junior Gold ETF (GDXJ – Free Report) has jumped to highs of $42.54 on Tuesday. Companies like Kinross Gold stock (KGC – Free Report), IMC International Mining (IMCX – Free Report) (IMIMF), Sibanye Gold Limited (SBGL – Free Report), and Novagold Resources (NG – Free Report) have all seen activity pick up this month.
Junior Gold Stocks Break To New 2020 Highs
IMC International, for example, managed to jump to highs of $0.50CAD. This was shortly after shares became dually listed on the OTC. Much of the recent attention has been on IMC’s most recent letter of intent to acquire Thane Minerals. Thane owns 100% interest in a property called Cathedral which is in an area called the “Quesnel Terrane”.
The Cathedral Project covers over 51,000 acres in Northern British Columbia. The fact that Cathedral is still in a relatively unexplored portion of the northern Quesnel Terrane means that IMC International has an opportunity to strike gold and other metals, first. This deal doesn’t just come with the Cathedral Project.
It comes with the Thane team as well. In particular, Greg Hawkins, MSc, PGeo. His ventures collectively have accounted for over $2.1 billion in market cap at the companies’ respective peaks. He’s also been variously responsible for the identification and/or delineation of 10 mineral deposits in Canada, USA, Chile, Ghana, Mali and Zaire (DRC).
Several of the companies Hawkins was part of ended up being acquired in big-ticket buyouts. Based on the potential of Cathedral and the addition of Greg Hawkins, IMC International could be one of the gold stocks to watch as the price of gold climbs this quarter.
Sibanye Gold Limited Hits New Highs
In a similar light, Sibanye Gold has managed to trend highs with gold. In fact, it has firmly pushed to levels it hasn’t seen since October of 2016. Aside from rising gold prices, Sibanye has also executed strongly on several fronts. This week the company said it boosted its reserve estimates for total platinum-group and gold-mineral resources at the South African operations.
In fact, the company said gold-mineral resources at its South African gold operations rose by 52%. Reduced costs associated with the integration of the Kloof operations in South Africa were a big contributing factor to this.
Kinross Gold: New 2020 Highs
Similarly, Kinross Gold has managed to hit fresh 2020 highs this week. The gold miner traded as high as $5.24 heading into its afternoon session on February 18. Last week, analysts from Raymond James reiterated their stance on the stock. The firm maintained an Outperform rating with a $6.50 price target.
The company also announced Q4 earnings and revenue expectations. Kinross reported Q4 adjusted earnings per share of $0.13. This was up from $0.01 EPS in the same quarter during the prior year. This also came in higher than the $0.10 estimates from certain analysts at Capital IQ.
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Furthermore, revenue from metal sales was up. For the quarter, Kinross reported $996.2 million in sales which was up from the prior year’s quarter of $786.5 million. It also beat out expectations of $947.8 million. Kinross expects relatively flat quarter-over-quarter production through 2020 “with a slight increase in Q4.” Shares of Kinross gold stock are up by more than 60% since the beginning of 2019.
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