10 Undervalued Canadian Stocks to Buy Now

3. Barrick Gold Corporation (NYSE:GOLD)

Forward P/E as of April 4: ~10.8x

Number of Hedge Fund Holders: 44

Based in Toronto, Canada, Barrick Gold Corporation (NYSE:GOLD) is engaged in the exploration, mine development, production, and sale of gold and copper properties.  Raymond James has retained an “Outperform” rating on the company’s stock. The firm lauded Barrick Gold Corporation (NYSE:GOLD)’s control over numerous high-quality gold mines and copper assets, which supported it in generating robust cash flow. The strategic benefit the company gained from the no-premium merger with Randgold remains noteworthy. Apart from adding more tier-one assets to the portfolio, it also substantially improved the FCF.

The establishment of the Nevada JV with Newmont remains a positive development for Barrick Gold Corporation (NYSE:GOLD). The collaboration manages the world’s largest gold complex. Furthermore, the JV is anticipated to yield significant synergies, which can enhance Barrick Gold Corporation (NYSE:GOLD)’s operational efficiency and financial performance. Overall, the company’s strategic initiatives and asset portfolio place it well in the industry. Its capability to leverage high-quality mines as well as the synergies from its JV can help fuel its robust cash flow.

Sound Shore Management, an investment management firm, released its Q3 2024 investor letter. Here is what the fund said:

“For example, global gold and copper miner Barrick Gold Corporation (NYSE:GOLD) rose after posting earnings that topped forecasts driven by improved cost performance as well as higher metals prices. We initiated our investment earlier this year when the stock was trading at below normal price to earnings and price to book valuations. The depressed valuation was largely due to long-term issues driven by poor acquisitions and shorter-term inflationary pressures that had been a drag on profitability. Following Barrick’s 2019 merger with Randgold, the latter’s senior management team took the reins and have since streamlined and optimized the company’s once sprawling asset base. Today, Barrick is set to improve operations and drive organic growth which, along with a better price environment, we believe should improve returns on capital. Bolstered by a nearly debt-free balance sheet and strong free cash flows, the company is well positioned to increase dividends, share buybacks and improve its valuation.”