Commodities & Metals

With Gold Sell-Off Likely Over, 5 Top Stocks to Jump On Now

Eldorado Gold

This stock has surged off the March lows and looks poised to move even higher. Eldorado Gold Corp. (NYSE: EGO) engages in the exploration, discovery, acquisition, financing, development, production, sale and reclamation of mineral products, primarily in Turkey, Canada, Greece, Brazil and Romania.

The company primarily produces gold, as well as silver, lead, zinc and iron ore. It operates five mines. Kisladag and Efemcukuru are located in western Turkey, Lamaque in Canada, and Olympias and Stratoni located in northern Greece.

Better than expected second-quarter earnings were due to lower than expected costs. For 2020, Eldorado maintained its 2020 operating guidance and said it expects gold output to be higher in the second half.

BofA Securities raised its $13 price objective to $15. The posted consensus target price of $1.98 looks to be incorrect as Eldorado Gold stock closed most recently at $11.44.

Kinross Gold

Investors who are more aggressive may want to consider this smaller cap mining company. Kinross Gold Corp. (NYSE: KGC) engages in the acquisition, exploration and development of gold properties, principally in Canada, the United States, the Russian Federation, Brazil, Chile, Ghana and Mauritania.

Kinross Gold is also involved in the extraction and processing of gold-containing ores, reclamation of gold-mining properties and the production and sale of silver. As of December 31, 2019, its proven and probable mineral reserves included approximately 24.3 million ounces of gold and 55.7 million ounces of silver.

The BofA team attributes the latest earnings beat in part to a lower tax rate. While Kinross kept its 2020 guidance withdrawn, it is on track to meet its prior gold equivalent ounce output and cost guidance for the year. The company reduced its net debt by $160 million quarter over quarter, largely due to free cash flow generation, and it sees higher output in the second half.

The $8.90 BofA Securities price target was raised to $11.25. The consensus target Kinross Gold stock is $10.53, and the most recent share price was $8.92.

Wheaton Precious Metals

This precious metals royalty stock makes good sense for more conservative accounts looking to have exposure to the sector. Wheaton Precious Metals Corp. (NYSE: WPM) is a Canadian precious metals streaming company with approximately 60% of its revenues from the sale of silver and 40% from gold.

Under the terms of long-term contracts, the company purchases silver and gold from a variety of mines, including Goldcorp’s Penasquito mine in Mexico, Vale’s Salobo mine in Brazil, the Lundin Mining Zinkgruvan mine in Sweden, and Glencore’s Antamina and Yauliyacu mines in Peru, then sells the silver and gold into the open market.

Shareholders receive a 0.76% dividend. The BofA Securities price target is now a whopping $64.50, up from $47.00. The consensus target is $55.33, and Wheaton Precious Metals stock was last seen at $52.48 per share.

Proper asset allocation should always include at least a single-digit percentage holding of precious metals like gold and silver. Not only do they hedge inflation over the long term, but they can really help if the market does go into correction or bear market mode, as they tend to trade inverse to markets.