One of the beautiful aspects about investing in gold stocks is relative clarity. When it’s time to consider ideas aligned with or related to the ultimate safe haven, the outside fundamentals will likely shine the organic path leading to precious metals. Essentially, when either societal stability is in question or inflation metrics are running hot, gold tends to be a reliable investment class.
At the current juncture, we’re getting a strong dosage of both elements. On the geopolitical front, there are many questions about how the Trump administration will handle the world’s most pressing matters. Among them, the idea of tariffs against key economic partners has many experts fretting. In the economic sphere, inflation has soared above expectations, cynically incentivizing the case for gold stocks.
While proponents of the precious metal will argue for owning physical bullion, such an approach is cumbersome. For investors seeking a more convenient — and potentially more lucrative — mechanism, these gold stocks could be just the right ticket.
Ranking as the world’s largest gold mining company, Newmont (NYSE:NEM) represents a powerhouse in metal exploration, production and processing. Beyond gold, it specializes in copper, silver, lead and zinc. With a rich history extending over a century, Newmont operates mines across North and South America, Australia and Africa.
While the ride in the price charts has been uncomfortably choppy at times, NEM stock has performed quite well, gaining over 40% in the past 52 weeks. Still, the valuation is relatively reasonable. At the moment, NEM trades hands for 3.04X trailing-12-month (TTM) sales. Fiscal 2024’s total revenue is projected to hit $18.33 billion, implying 55.21% growth over last year’s results. For the current year, analysts anticipate a top-line print of $19 billion.
At this point last year, the price-to-sales ratio was about 2.55X. All things considered, especially with the cynically backdrop favoring gold stocks, NEM appears to be a solid long-term investment.
Last week, NEM stock posted a modest gain of about 1%. Whenever NEM posted a one-week return of up to 5%, the long odds for the subsequent fourth week lands at 55.32%. Further, the median return during the positive scenario comes out to 7.12% or a target price of $49.85
Traders who want to take an ultra-aggressive wager could consider the 47/50 bull call spread for the options chain expiring March 14.
One of the world’s largest gold and copper mining companies, Barrick Gold (NYSE:GOLD) operates a global portfolio of high-quality mines across the Americas, Africa and the Middle East. Founded in the early 1980s, Barrick focuses on large-scale, high-margin mining projects, ensuring efficient production and long-term reserves. It’s one of the more reliable gold stocks, traditionally making it a solid investment idea.
What makes Barrick particularly attractive is that it could be undervalued on a relative basis. For fiscal 2025, analysts anticipate revenue to reach $13.71 billion, up 6.09% from last year. For fiscal 2026, the Street’s experts believe that the top line could expand to $15.32 billion. While it’s not blistering growth, the business is moving at a healthy clip, especially for an organization of its size.
What’s more, GOLD stock trades for only 2.43X TTM sale. At this point last year, the equity exchanged hands at 2.56X sales. Still, in the market, GOLD gained almost 22% in the past 52 weeks.
Last week, GOLD gained roughly 3%. Anytime the security gains up to 5% over a five-trading-session period, the long odds for the subsequent third week land at just under 60%. Further, the median return under the positive scenario is 5.32%, implying an upside target of $18.89.
Aggressive traders may consider the 18/18.50 bull call spread for the options chain expiring March 7. At time of writing, the payout for this spread stands at over 127%, suggesting a favorable mispricing.
Moving onto the more speculative realm of gold stocks, Kinross Gold (NYSE:KGC) is a mid-tier gold miner, featuring operations in the Americas and West Africa. Founded in the early 1990s, Kinross focuses on cost-effective gold production, emphasizing low-risk jurisdictions and efficient mine operation. It owns and operates a mix of open-pit and underground mines, again emphasizing long-life, low-cost assets.
While not the greatest value ever on account of KGC stock more than doubling in value over the past year, it still arguably offers a lot for prospective investors. For fiscal 2025, analysts are looking for earnings per share to rise 11.76% to 76 cents. On the top line, experts anticipate sales to reach $5.52 billion, up 7.28%. Still, with all that has happened, KGC is reasonably priced at 2.7X sales.
For long-term buy-and-hold investors, Kinross will likely be choppier and less predictable than other gold stocks. However, the underlying fundamentals are cynically positive, potentially giving bulls the edge.
Last week, KGC stock suffered a loss of roughly 7%. Whenever the security loses 5% to 10% in a one-week period, the long odds for the subsequent second week stand at nearly 66%. Under the positive scenario, the median return is 7.26%, implying an upper price target of $12.09.
If you want to be wildly aggressive, you could buy the 11.50/12 bull call spread for the options chain expiring Feb. 28. KGC stock would need to hit $12 or higher but the reward would be a payout of 194%.
