In this article, we will take a detailed look at the 12 Best Gold Stocks Under $25. For a quick overview of such stocks, read our article 5 Best Gold Stocks Under $25.
Gold prices slipped recently amid indications from several Fed officials that the central bank won’t show haste in cutting interest rates as inflation continues to remain stubborn. Gold prices reacted to this development negatively as historically a low-rate environment bodes well for the precious metal. However, long-term investors believe gold remains a solid option since sooner or later the Fed will begin to cut rates and there are several other catalysts that make gold stocks worth buying.
According to a report by World Gold Council, gold consumption in 2023 increased by about 3% to 4,899 tons, fueled by massive central bank buying and demand from OTC markets.
Demand of gold in China has been a significant catalyst for the precious metal as people turn to the precious metal because of its intrinsic value amid a decline in property prices and other investment options. A Bloomberg report earlier this month cited Nikos Kavalis, managing director at consultancy Metals Focus Ltd, who said that the difficulty to move your money out of China and lack of alternatives are giving a boost to gold in the country.
Some other catalysts for gold stocks like Barrick Gold Corp (NYSE:GOLD), Kinross Gold Corporation (NYSE:KGC) and B2Gold Corp (NYSE:BTG) include investors’ wish to continuously diversify their portfolios for troubled economic times and stay invested in safe-haven assets. A report by State Street Gobal Advisors said that gold has historically delivered positive risk-adjusted returns in the past, with a 7.7% compound annual growth rate in USD terms since 15 August, 1971.
But does strengths in gold prices help gold stocks? A report by investment management company VanEck analyzed some data to show that gold prices are directly linked to gold stocks.
“Gold stocks are supposed to outperform the metal when gold’s price is rising. Their leverage to gold justifies outperformance. For any given move in the price of gold, operating cash flow generated by these companies increases (or decreases) by a much greater percentage. Take Alamos (8.06% of Fund net assets), for example. The company estimates that a 5% increase in the price of gold (about a+$100/oz move), would translate into an increase of almost 30% in their free cash flow in 2024. “
However, the report noted that over the past two years there has been a disconnect noted between gold prices and gold stocks, mainly due to central bank buying and several other factors of temporary nature.
A closeup view of a large gold mine, illustrating the company’s gold properties.
Methodology
For this article we scanned Insider Monkey’s database of 900+ hedge funds and picked gold stocks trading under $25 with the highest number of hedge fund investors. These are the best gold stocks under $25 according to smart money managers. But why care about what hedge funds are doing? Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
12. Gold Fields Limited (NYSE:GFI)
Number of Hedge Fund Investors: 13
With a low PE ratio and a dividend yield of about 2.8%, gold mining company Gold Fields Limited (NYSE:GFI) ranks 12th in our list of the best gold stocks under $25.
As of the end of the third quarter of 2024, 13 hedge funds tracked by Insider Monkey had stakes in Gold Fields Limited (NYSE:GFI). The biggest stake in Gold Fields Limited (NYSE:GFI) is owned by William B. Gray’s Orbis Investment Management which owns a $70 million stake in Gold Fields Limited (NYSE:GFI).
11. SSR Mining Inc (NASDAQ:SSRM)
Number of Hedge Fund Investors: 14
Gold and silver mining company SSR Mining Inc (NASDAQ:SSRM) ranks 11th in our list of the best gold stocks to buy under $25 according to hedge funds. In November SSR Mining Inc (NASDAQ:SSRM) posted third quarter results. Adjusted EPS in the period came in at $0.26. Revenue in the quarter jumped 131.3% year over year to $385.39 million.
Of the 910 funds in Insider Monkey’s database, 14 hedge funds had stakes in SSR Mining Inc (NASDAQ:SSRM).
Palm Valley Capital Management made the following comment about SSR Mining Inc. (NASDAQ:SSRM) in its Q3 2023 investor letter:
“We did not fully sell any positions during the third quarter. We purchased four new names: Avista Corporation (ticker: AVA), Farmland Partners (ticker: FPI), Equity Commonwealth (ticker: EQC), and SSR Mining Inc. (NASDAQ:SSRM). We believe these opportunities materialized because higher interest rates are disproportionately impacting investor sentiment toward certain sectors, even as capitalization-weighted, tech-heavy indexes have powered through the headwinds.
SSR Mining is back in the Fund after a brief hiatus. SSR is a precious metals producer with four mines located in the United States, Turkey, Canada, and Argentina. The company is selling at a meaningful discount to its tangible book value and our calculated net asset value. SSR has a very strong balance sheet with more cash than debt and $4.6 billion in stockholders’ equity. Furthermore, the firm has a history of generating free cash flow, buying back stock, and paying a sustainable dividend.”
10. Iamgold Corp (NYSE:IAG)
Number of Hedge Fund Investors: 14
Gold mining company Iamgold Corp (NYSE:IAG) ranks tenth in our list of the best gold stocks to buy under $25 according to hedge funds. Last month, the stock jumped after Iamgold Corp (NYSE:IAG) reported full-year 2023 gold production which was stronger than expected.
Out of the 910 hedge funds tracked by Insider Monkey, 14 funds had stakes in Iamgold Corp (NYSE:IAG). The biggest stake in Iamgold Corp (NYSE:IAG) is owned by David Iben’s Kopernik Global Investors which owns a $38.4 million stake in Iamgold Corp (NYSE:IAG).
9. Coeur Mining Inc (NYSE:CDE)
Number of Hedge Fund Investors: 15
Headquartered in Chicago, Illinois, Coeur Mining Inc (NYSE:CDE) is a precious metals mining company. The stock has gained about 2.4% over the past six months.
As of the end of the third quarter of 2023, 15 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Coeur Mining Inc (NYSE:CDE). The biggest stake in Coeur Mining Inc (NYSE:CDE) is owned by Paul Marshall and Ian Wace’s Marshall Wace LLP which owns a $22 million stake in Coeur Mining Inc (NYSE:CDE).
8. NovaGold Resources Inc (NYSE:NG)
Number of Hedge Fund Investors: 15
Yet another penny stock in our list, Canadian gold mining company NovaGold Resources Inc (NYSE:NG) shares were spotted in 15 hedge fund portfolios as of the end of the third quarter of 2023. The most significant stake in NovaGold Resources Inc (NYSE:NG) is owned by John Paulson’s Paulson & Co which owns an $85 million stake in NovaGold Resources Inc (NYSE:NG).
In addition to NovaGold, hedge funds are also buying Barrick Gold Corp (NYSE:GOLD), Kinross Gold Corporation (NYSE:KGC) and B2Gold Corp (NYSE:BTG).
7. Sibanye Stillwater Ltd (NYSE:SBSW)
Number of Hedge Fund Investors: 16
Metals and mining processing company Sibanye Stillwater Ltd (NYSE:SBSW) has a dividend yield of about 7% and a PE ratio of 4.67. It ranks seventh in our list of the best gold stocks to buy under $25.
As of the end of the third quarter of 2023, 16 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Sibanye Stillwater Ltd (NYSE:SBSW). The biggest stake in Sibanye Stillwater Ltd (NYSE:SBSW) is owned by Cliff Asness’s AQR Capital Management which owns a $31 million stake in Sibanye Stillwater Ltd (NYSE:SBSW).
6. Osisko Gold Royalties Ltd (NYSE:OR)
Number of Hedge Fund Investors: 18
Canadian-based gold and silver royalties company Osisko Gold Royalties Ltd (NYSE:OR) shares have gained about 6% in 2024 so far through February 7.
Out of the 910 funds tracked by Insider Monkey, 18 hedge funds had stakes in Osisko Gold Royalties Ltd (NYSE:OR). The biggest stake in Osisko Gold Royalties Ltd (NYSE:OR) is owned by Israel Englander’s Millennium Management which owns an $104 million stake in Osisko Gold Royalties Ltd (NYSE:OR).
Osisko Gold talked about its Q4 guidance in a latest earnings call:
“By the end of 2024, we can also expect both Namdini and Tocantinzinho gold projects to be added to this list. Along with Osisko’s high precious metal exposure, especially diamonds no longer serving as a major GEO contributor, our company continues to distinguish itself from pure leading jurisdictional exposure as it relates to both production and NAV to what Osisko defines as Tier 1 mining jurisdictions, which include Canada, the United States and Australia. Recent global events have only served to underpin our belief that maintaining a high exposure to both Tier 1 and very well-established mining jurisdictions where mining has been a key industry or part of the overall culture is extremely important. As stated in our press release last night, after joining the team and subsequently going through a full portfolio review, in addition to factoring events that have transpired over the past years since this company last published it’s 2023 guidance and previous five-year outlook, the company has updated these numbers to reflect what we believe to be achievable ranges.
With respect to our 2024 guidance of 82,000 to 92,000 GEOs, it goes without saying that there is a significant void in terms of GEOs that has been left by the shutdown of or not. Production improvements and new mine startups, plus the CSA copper stream coming online for us on June 15th are expected to partially offset this reduction. However, cornerstone asset, Canadian Malartic is guided to be flat to maybe modestly down year over year in large part, because of Ignyta’s decision to defer the reintroduction of progression lower grade ore to increase mill throughput, which is now not expected to happen until 2025 In 2024, Mill throughput is expected to be sourced primarily from the Barnat pit, as well as the Odyssey underground and to a lesser extent, with total throughput estimated to be 52,000 tonnes per day in 2024 versus a nameplate capacity of 60,000 tonnes per day.”
Read the full earnings call transcript here.
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Disclosure. None. 12 Best Gold Stocks Under $25 was initially published on Insider Monkey.
