NEM: 3 Buy Rated Gold Mining Stocks

Times of crisis = gold rally

And if you like gold…you will love gold miners.

This explains why the gold mining stocks are currently the #1 ranked industry (out of 123) according to the POWR Ratings with many of the stocks up 20 to 50% this year while the rest of the market is racked with nasty losses.

But that is in the past. Let’s talk about why these 3 Buy rated gold mining stocks are still attractive going forward: Newmont Gold (NEM - Get Rating), Franco-Nevada Corporation (FNV - Get Rating) and DRDGOLD Limited (DRD).

Newmont Gold (NEM - Get Rating)

Gold has trended upwards throughout the coronavirus pandemic. This “safe haven” is likely to continue to increase in the months to come. If you are hesitant to invest in a wide array of stocks, follow the lead of Nassim Taleb, the author of The Black Swan, and invest in gold. Aside from land, gold is Taleb’s sole investment in this unpredictable market.

NEM is one of the best places to park your money as you watch the market undulate in the weeks and months ahead. JP Morgan analysts have heaped on the praise for this relatively safe stock, sending it from $40 in mid-march to its current price in the low $60’s. TipRanks’ analyst rating consensus reveals 7 analysts have a “buy” rating on NEM. Even better Adam Graf from B. Riley FBR just recently raised his target to $98 which is more than 50% upside from the current level.

Conventional wisdom may tell you to take some profits in the aftermath of NEM’s recent meteoric rise. However, plenty of analysts believe millions of impending loan defaults and inevitably disappointing second quarter earnings reports to come are not fully priced into the market. If the market reveals itself to be a true bear in the coming weeks, and the crisis continues, then the likes of NEM will likely continue to ascend even higher as more money is poured into gold.

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Franco-Nevada Corporation (FNV - Get Rating)

FNV is a royalty/stream business that operates on four continents…and right now it is hitting on all cylinders. This explains the 32% gain year to date and even more impressive 94% gain going back 1 year.

As detailed in this informative Motely Fool article, FNV provides investors with a chance to profit from gold without investing in actual gold mining operations. This royalty company also has additional operations in platinum metals, oil and gas. The increasing economic uncertainty is likely to help FNV bolster its dividend payout for a 13^th straight year.

DRDGOLD Limited (DRD)

If you are like most investors, you are looking for a way to get in on the gold action, possibly from every angle. DRD provides just that opportunity. DRD performs surface gold mining including the extraction of gold, processing, smelting and more. In short, DRD does everything gold-related and then some.

DRD is the smallest stock we are talking about today with a market cap of only $644 million. But as they say, “good things come in small packages” as DRD is up 82% this year and an eye popping 398% the past 12 months.

The math is pretty simple. If gold prices rise and mining costs per ounce are stable, then profits grow. And now with many analysts looking for gold to rise to $2,000 or more there is strong reason to believe that DRD’s impressive run is far from over.

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NEM shares closed at $63.11 on Friday, up $0.67 (+1.07%). Year-to-date, NEM has gained 45.66%, versus a -11.57% rise in the benchmark S&P 500 index during the same period.

About the Author: Steve Reitmeister

Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks. More...