In this article we take a look at 10 best precious metals stocks to buy now. You can skip our detailed discussion of the precious metals industry and its growth catalysts and go to 5 Best Precious Metals Stocks to Buy Now.
Long-term investors love precious metals stocks. The precious metals group – primarily consisting of gold, silver, platinum, and palladium – has an inherent worth, which makes it a safe-haven asset. Investors flock to gold, a top precious metal, during times of crisis. In August 2020, driven by the coronavirus crisis, gold price surged about 30% and reached the $2000 mark for the first time. However, gold prices are subject to market conditions, interest rates and supply-demand changes. Fitch recently increased its price target for gold to $1600 per ounce from $1,400 per ounce for 2021. However, rising yields and strengthening dollar is causing gold price to recede.
Why Should You Buy Precious Metals Stocks?
But precious metals stocks aren’t only about gold. Silver is another key member which is currently in the spotlight following investors on Reddit joined hands to push the precious metal price to record highs, trying to cause another “short squeeze.” But long-term investors should ignore the fickle market movements that are not backed by fundamental catalysts. Silver remains one of the best precious metals to invest in amid rising demand. Data shows that global silver demand is expected to reach an 8-yer high of 1.025 billion ounces in 2021.
Precious metals aren’t just about jewelry and necklaces. They have immense applications in the industry. Consider platinum as an example, which is used in emissions-scrubbing catalytic converters. Platinum suffered in 2020, but its prices are set to rebound as economic activity comes back all over the world. Platinum is also used in manufacturing of fertilizer ingredients, silicones, hard disks, glass products, dental equipment and home appliances.
Another key catalyst for precious metals stocks in 2021 and beyond is copper, whose demand is rising as consumers load up on items like washing machines, freezers and cars. One of the biggest drivers of copper demand is China’s relentless economic activity. A report shows that the country’s “Made in China” plan will boost copper demand by 232,000 tonnes by 2025.
Copyright: tomas1111 / 123RF Stock Photo
Palladium is another promising precious metal with huge growth opportunities. The metal has several applications in dentistry, electronics, energy markets and jewelry. Here is what Deloitte said in a report about the precious metal and its outlook:
Scarcely believable a few years ago, palladium is now a more valuable commodity than gold. It has been one of the best performing commodities for the past two years. Europe’s diesel emissions scandal has been hugely beneficial for a commodity whose primarily application is in the exhaust systems of cars. After hitting a 12-month low in August, palladium prices have increased by more than 70% since then.
Safe-haven stocks have seen their importance jump as volatility grows. Even the smart money is struggling keeping up with the changing market trends. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 88 percentage points since March 2017. Between March 2017 and February 5th 2021 our monthly newsletter’s stock picks returned 187.5%, vs. 75.8% for the SPY. Our stock picks outperformed the market by more than 111 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Let’s start our list of the 10 best precious metals stocks to buy now.
10. Platinum Group Metals Ltd. (NYSE: PLG)
No. of Hedge Fund Holders: 7
Platinum Group Metals Ltd. is a development-stage, exploration company dealing in platinum. Through joint ventures and partnerships the company has operations in South Africa and Canada. Announcing its financial results in January 2020, the company said it plans to advance palladium dominant Waterberg Project located in South Africa. The stock has shown an impressive performance over the last 12 months, gaining 130% in value.
A total of 7 hedge funds tracked by Insider Monkey held stakes in PLG at the end of the fourth quarter compared to the 3 funds at the 3rd quarter.
9. Endeavour Silver Corp. (NYSE: EXK)
No. of Hedge Fund Holders: 10
Endeavour Silver ranks 9th on our list of 10 best precious metals stocks to buy now. The company primarily mines silver from mines in Mexico and Chile. In the fourth quarter, the company posted a non-GAAP EPS of $0.13, beating the Street estimates by $0.07. Revenue in the period jumped a whopping 76% to reach $61.2 million, beating the consensus by $11.22 million. The stock has gained about 260% over the last 12 months.
A total of 10 hedge funds tracked by Insider Monkey at the end of the fourth quarter had EXK shares on their portfolios. Among these hedge funds is Israel Englander’s Millennium Management, with 1.64 million shares worth $8.3 million.
8. First Majestic Silver Corp. (NYSE: AG)
No. of Hedge Fund Holders: 12
First Majestic ranks 8th in our list of 10 best precious metals stocks to buy now. With several silver and gold mines, the company sells its own bullion rounds and bars. In 2020, it produced 11.6 million ounces of silver, meeting the top-end of its guidance, thanks to the strong output of La Encantada and San Dimas mines. Gold production in the period reached 100,081 ounces, narrowly missing the company’s guidance. First Majestic shares have gained 105% over the last 12 months.
A total of 12 hedge funds tracked by Insider Monkey held stakes in the company at the end of the fourth quarter.
7. Eldorado Gold Corporation (NYSE: EGO)
No. of Hedge Fund Holders: 14
Eldorado Gold owns gold mines in Turkey and Greece and Canada. In 2020, the company’s gold production came in at 528,874 ounces, up 34% from production of 395,331 ounces in 2019. In the fourth quarter, the company posted non-GAAP EPS of $0.33, beating the Street’s estimates by $0.01. Revenue in the period jumped 45% but still missed the consensus estimates.
As of the end of the fourth quarter of 2020, 14 hedge funds tracked by Insider Monkey were long EGO, down from 15 funds a quarter earlier.
6. Coeur Mining, Inc. (NYSE: CDE)
No. of Hedge Fund Holders: 17
Coeur mines gold and silver in Mexico, Bolivia, U.S. and Argentina. The company recently said it plans to offer $350 million of senior notes due 2029. The company missed analysts’ forecasts for the fourth quarter, posting EPS of $0.08 over $228.3 million revenue. The stock is up 92% over the last 12 months.
Overall, 17 hedge funds tracked by Insider Monkey held stakes in CDE at the end of December 2020.
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Disclosure: None. 10 Best Precious Metals Stocks To Buy Now is originally published on Insider Monkey.
