The market is starting to get nervous, and so are some major investors. Carl Icahn recently came out with some very bearish commentary, and he isn’t alone. Risk assets have been bid up huge since the lows of 2009, and in less than a year we have had two 10% declines, after not having one in the previous three years. So the question is what can investors do to protect their assets without selling everything and settling for money market yields?
One idea that makes sense is to add some gold to a portfolio, and adding some of the top stocks in the sector can help to protect a portfolio should we see a drastic sell-off. One of the best in covering the sector is RBC, which is right in the middle of is Global Mining and Materials conference. The firm has four top stocks rated Overweight that make good additions to growth portfolios.
Agnico Eagle Mines
This top stock has remained a long-time Wall Street favorite. Agnico Eagle Mines Ltd. (NYSE: AEM) is a senior Canadian gold mining company that has produced precious metals since 1957. Its eight mines are located in Canada, Finland and Mexico, with exploration and development activities in each of these regions, as well as in the United States and Sweden. The company and its shareholders have full exposure to gold prices due to its long-standing policy of no forward gold sales. Agnico Eagle has declared a cash dividend every year since 1983.
The company posted outstanding results at the end of April, with adjusted earnings per share more than double the Merrill Lynch estimate. Agnico Eagle also noted that it now expects 2016 production to be at the top end of guidance, and that could continue to bode well for earnings.
The company remains one of the top picks on Wall Street as it fits the objectives of having quality mining assets with attractive margins, and it sports a very solid balance sheet.
Agnico Eagle investors are paid a 0.7% dividend. The RBC price objective is $46 and may be going higher soon. The Thomson/First Call consensus price target is $45.94. The stock closed Wednesday at $51.26 per share.