The year 2016 has been a continued bull market, now marking seven and a half years of gains from the V-bottom in March 2009. Perhaps even more unexpected in 2016 was the fury of the gold bulls, with gold rising from $1,060 per ounce to over $1,350. This was greatly unexpected at the start of 2016, and now some of the key gold stocks have risen and risen in 2016. Some have year-to-date gains in excess of 100% — and even 200%!
24/7 Wall St. tracks dozens of analyst calls each day of the week, and this ends up being hundreds of stocks each week. The week of August 12 brought new all-times highs for the Dow, Nasdaq and the S&P 500. It turns out that there are still some gold stocks in which analysts see value and are telling their clients to buy the shares.
Now that we are well into the second half of 2016, investors should be starting to think about what they want to own for 2017 and beyond. The election may play a part of that decision. Either way, investors should not just assume that a sector rising 100% and 200% should just keep rising. That makes these likely more attractive on pullbacks.
These four gold stocks were not all the ones with analyst calls made in the week of August 12, but these were the ones that stood out for upside.
Alamos Gold Inc. (NYSE: AGI) was raised to Outperform from Sector Perform at National Bank on August 11. On the same day, Desjardins raised its rating on Alamos Gold to Buy from Hold. Alamos was also part of a larger gold call this last week from Credit Suisse, and the firm reiterated its Outperform rating and a $10.75 price target. Alamos was at $9.20 before the calls, but it closed at $9.00 on Friday, with a consensus analyst target price of $10.21. Credit Suisse sees production light but costs in line with expectations, and it sees improvements in the second half after its earnings report was not as strong as some analysts would have liked.
Eldorado Gold Corp. (NYSE: EGO) was raised to Buy from Neutral at Goldman Sachs on August 10. It was assigned a $5 price target in the call, versus a prior closing price of $4.05. Eldorado Gold closed out the week at $4.19, and its 52-week trading range is $1.87 to $5.16. Its consensus price target rose to $5.82 from $5.78 after the call. Before wondering why the upside is not so massive here, it is important to realize that Eldorado Gold shares are up 41% so far in 2016.
Goldcorp Inc. (NYSE: GG) is one of the top gold mining players of them all, due to its $16.1 billion market cap. Morgan Stanley initiated Goldcorp coverage with an Overweight rating on August 9. More importantly, it is issued a $22 price target. The implied upside was 25%, if you include the dividend, from its prior closing price of $17.66. Unfortunately, some of that upside was eaten up later in the week as Goldcorp shares closed at $18.88 on Friday. Its consensus price target is $21.37, and it has a 52-week range of $9.46 to $20.38.
Hecla Mining Co. (NYSE: HL) was raised to Overweight from Neutral at JPMorgan on August 9, with the firm assigning an $8 price target (versus a $6.78 prior close). Also on August 9, FBR Capital maintained its Market Perform rating but raised its price target to $6 from $5. Hecla Mining ended the week at $6.99, but that is now above the consensus price target of $6.49 (was a consensus of $6.16 the prior week). The shares have a 52-week range of $1.45 to $6.90.
Other key gold news and news on gold stocks has been seen as follows: