The ongoing earnings season is expected to underwhelm investors, with businesses weighed down by high borrowing costs, deflated asset prices, and softening consumer demand due to decreased discretionary expenditure.

With the Federal Reserve unwilling and unlikely to risk complacency in its efforts to cool down an economy that bore the brunt of decades-high inflation for much of the previous year, investors should reshuffle their portfolios to dodge the potential volatility ahead.

Moreover, with the U.S. economy perilously close to defaulting on its stratospheric debt and China having its rare macroeconomic and demographic moment, the World Bank’s cut in the global economic growth outlook to 1.7% for 2023 from its earlier projection of 3% seems increasingly credible.

Since SPDR Gold Trust ETF (GLD) has gained 4.4% over the past year compared to the S&P 500’s decline of 8.9%, gold mining stocks Gold Fields Limited (GFI), Centamin plc (CELTF), and DRDGOLD Limited (DRD) could be ideal investments to help portfolios retain their luster even amid inflation, volatility, and occasional black swan events.

Gold Fields Limited (GFI)

GFI is a gold producer based in Sandton, South Africa. The company also explores for copper and has reserves and resources in Chile, South Africa, Ghana, West Africa, Australia, and Peru.

For the six months of the fiscal year that ended June 30, 2022, GFI’s gold production increased 8.8% year-over-year to 1,201 Koz. During the same period, the company’s revenue also increased 2.9% year-over-year to $1,851/oz., while its net debt decreased 22.4% from the previous-year period to $851 million.

As a result, GFI’s half-yearly headline earnings increased 31% and 28.9% year-over-year to $518 million or $0.58 per share, respectively.

GFI’s revenue for the fiscal ended December 31, 2022, is expected to increase 1.9% year-over-year to $4.29 billion. It is expected to increase by a further 2.3% to $4.39 billion during the current fiscal.

The stock has gained 16.7% over the past month and 41.8% over the past six months to close the last trading session at $12.22.

GFI’s POWR Ratings reflect its robust fundamentals. It has an overall rating of B, translating to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

GFI also has a B grade for Value, Sentiment, and Quality. It is ranked #6 of 39 stocks in the Miners – Gold industry. 

Click here to access additional ratings for Growth, Stability, and Momentum for GFI.

Centamin plc (CELTF)

CELTF, headquartered in Saint Helier, Jersey, explores, mines, and develops gold and other precious metals in Egypt, Burkina Faso, Côte d’Ivoire, Jersey, the United Kingdom, and Australia. The company’s principal asset is the Sukari Gold Mine project, covering an area of approximately 160 square kilometers located in the Eastern Desert of Egypt.

On January 16, CELTF announced a ruling by the Egyptian Supreme Constitutional Court (SCC) in its favor. The court upheld the constitutionality of Egyptian Law No. 32, which provides that third parties are prevented from lawfully challenging contractual agreements between the Egyptian government and an investor(s), such as the Sukari Gold Mine Concession Agreement.

The judgment was welcomed by CELTH, which would now be in a position to apply to set aside the 2011 third-party challenge to the validity of the license issued under the Sukari Concession Agreement.

During the fourth quarter of the previous fiscal year, CELTH commissioned the 36Mw Sukari solar plant. This helped the company to deliver immediate cost savings and reductions in carbon emissions and went a long way towards providing access to a $150 million sustainability-linked revolving credit facility providing greater flexibility to fund growth.

During the fiscal year 2022, CELTF’s gold production increased 6.2% year-over-year to 440.97 Koz. The company’s gold sales increased 7.7% year-over-year to 438.64 Koz during the same period. At the realized price of $1,794/oz., the revenue came in at $788.4 million, up 7.5% year-over-year.

CELTF’s revenue for the fiscal ended December 31, 2022, is expected to come in at $800.27, translating to an increase of 9.1% year-over-year. Analysts expect the company’s revenue to increase by a further 2.7% during the current fiscal to come in at $821.75 million.

CELTF has an overall B rating, which translates to a Buy in our POWR Ratings system. It also has a B grade for Stability, Value, and Quality.

CELTF is ranked #3 of 39 stocks in the Miners – Gold industry. Additional ratings for CELTF’s Growth, Sentiment, and Momentum can be found here. 

DRDGOLD Limited (DRD)

DRD, headquartered in Johannesburg, South Africa, is a subsidiary of Sibanye Gold Limited. Through its involvement in the exploration, extraction, processing, and smelting activities, the company recovers gold from the retreatment of surface tailings in the Witwatersrand basin in the Gauteng province of South Africa.

During the fiscal quarter that ended September 30, 2022, DRD reported a 1% sequential increase in production to 1 453kg, due primarily to a 1% increase in tonnage throughput. Gold sold by the company during the same period amounted to 1442 kg.

Cash and cash equivalents for the period amounted to R245.1 million ($14.28 million) after paying the final cash dividend of R342.5 million for the year ended 30 June 2022. DRD plans to use the cash generated during the current quarter towards its extended capital expenditure plan for the fiscal ending 30 June 2023.

DRD’s revenue during the current fiscal is expected to increase 6.7% year-over-year to $302.42 million. The stock has gained 18.9% over the past month and 47% over the past six months to close the last trading session at $8.45.

DRD has an overall rating of B, equating to a Buy in our POWR Ratings system. It also has a B for Value.

DRD ranks #4 in the same industry. Click here for additional POWR Ratings for DRD’s Growth, Stability, Sentiment, Quality, and Momentum.

GFI shares were trading at $12.21 per share on Tuesday afternoon, down $0.01 (-0.08%). Year-to-date, GFI has gained 17.97%, versus a 4.78% rise in the benchmark S&P 500 index during the same period.

About the Author: Santanu Roy

Having been fascinated by the traditional and evolving factors that affect investment decisions, Santanu decided to pursue a career as an investment analyst. Prior to his switch to investment research, he was a process associate at Cognizant. With a master's degree in business administration and a fundamental approach to analyzing businesses, he aims to help retail investors identify the best long-term investment opportunities. More...

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