1. Harmony Gold Mining (NYSE:HMY)
Upside Potential: 92.52%
Market Cap: $6.33 Billion
Harmony Gold Mining (NYSE:HMY) is one of the largest gold mining companies in South Africa by production. Almost all of its gold mine assets are located in South Africa, which contributes to 90% of its total gold output. However, the company also has gold and copper assets in Papua New Guinea, and Australia. The company focuses on assets where it believes it can acquire the highest mineral grades to maintain strong operating margins.
Harmony Gold Mining’s (NYSE:HMY) gold production has shown impressive stability over the past three years. At the start of the financial year 2024, the management had projected that its production would remain stable as compared to the previous year. However, the company significantly exceeded expectations, as the gold production increased by 12% year-over-year in the first half of FY24, reaching 832,000 ounces. This remarkable performance was driven by an 11% increase in recovered grades from its underground gold mines. The strong production momentum continued into the third quarter and the management raised its full-year production target to 1.55 million ounces, surpassing the initial expectation of 1.38 million to 1.47 million ounces. In the latest operational update released on August 26, Harmony Gold announced that it will achieve a full-year production volume of 1.56 million ounces, marking a 6% increase year-over-year, with recovered grades also up 6% to 6.11 g/t.
Gold prices reached an all-time high of $2,531.70 per ounce on August 27, driven by strong demand and favorable market conditions. J.P. Morgan Research forecasts that gold will maintain a stable price of $2,500 per ounce by the end of 2024 and rise to $2,600 per ounce in the first half of 2025. Harmony Gold is exceptionally well-positioned to capitalize on the upward trend in gold prices. This leverage, combined with stronger-than-expected production growth from its core underground assets, sets Harmony Gold apart from its competitors.
Harmony Gold Mining (NYSE:HMY) is trading 11.11 times its earnings, which is a 31% discount compared to the sector median of 16.10. The company’s earnings are expected to grow by 68.61% this year. In the second quarter, Harmony Gold Mining’s (NYSE:HMY) stock was held by 17 hedge funds with stakes worth $171.88 million. Kopernik Global Investors is the largest shareholder in the company with a stake worth $26.90 million as of June 30. Industry analysts have a consensus on the stock’s Buy rating, setting an average share price target at $10.30, which represents a 92.52% upside potential from its current level.
While we acknowledge the potential of Harmony Gold Mining (NYSE:HMY) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than the stocks on our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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