In this article, we discuss the 5 best gold stocks to buy for inflation. If you want to read about some more gold stocks, go directly to 10 Best Gold Stocks to Buy for Inflation.
5. Franco-Nevada Corporation (NYSE:FNV)
Number of Hedge Fund Holders: 29
Franco-Nevada Corporation (NYSE:FNV) is a gold-focused royalty and streaming company. The firm has an impressive dividend history stretching back thirteen years. In the past two years, the payouts have grown consistently. In late January, the firm declared a quarterly dividend of $0.32 per share, an increase of close to 7% from the previous dividend of $0.30 per share. In earnings results for the fourth quarter of 2021, the company beat market expectations on earnings per share and revenue by $0.44 and $10 million, respectively.
On April 11, investment advisory BMO Capital maintained an Outperform rating on Franco-Nevada Corporation (NYSE:FNV) stock and raised the price target to C$205 from C$194. Analyst Jackie Przybylowski issued the ratings update.
At the end of the fourth quarter of 2021, 29 hedge funds in the database of Insider Monkey held stakes worth $1 billion in Franco-Nevada Corporation (NYSE:FNV), up from 26 in the preceding quarter worth $951 million.
4. Kinross Gold Corporation (NYSE:KGC)
Number of Hedge Fund Holders: 31
Kinross Gold Corporation (NYSE:KGC) acquires, explores, develops gold properties. On April 5, the company announced that it had agreed to sell all of its Russian assets to mining firm Highland Gold Mining in a deal worth $680 million. The latter is one of the largest gold mining firms in Russia. The deal is reportedly the first complete sale of the assets of a Western firm in Russia since the start of the Ukraine war. The shares of the firm had fallen in the wake of the war but have risen since it announced the sale of the assets.
On March 9, BMO Capital Jefferies analyst Christopher LaFemina kept a Hold rating on Kinross Gold Corporation (NYSE:KGC) stock and raised the price target to $6 from $5.5, predicting that greater geopolitical risk will delay a supply response to high prices in the metals sector in the coming months.
At the end of the fourth quarter of 2021, 31 hedge funds in the database of Insider Monkey held stakes worth $365 million in Kinross Gold Corporation (NYSE:KGC), up from 27 in the previous quarter worth $321 million.
3. Newmont Corporation (NYSE:NEM)
Number of Hedge Fund Holders: 45
Newmont Corporation (NYSE:NEM) produces and explores for gold. On March 17, the company announced that it had won approvals from the state and local authorities for the Coffee Gold Project. Nearly 9 million metric tons of ore will be extracted on an annual basis from the project. The probable mineral reserves from the project are estimated at 46.4 million tons grading 1.45 g/t gold, containing 2.15 million oz of gold. On April 12, the company had agreed to acquire a larger stake in Yanacocha, the largest gold mine in South America, in a deal worth $48 million.
On February 28, Bank of America analyst Michael Jalonen kept a Buy rating on Newmont Corporation (NYSE:NEM) stock and raised the price target to $75 from $70, appreciating that the capital allocation priorities of the firm remained intact.
At the end of the fourth quarter of 2021, 45 hedge funds in the database of Insider Monkey held stakes worth $1.3 billion in Newmont Corporation (NYSE:NEM), compared to 48 in the preceding quarter worth $774 million.
In its Q3 2021 investor letter, First Eagle Investment Management, an asset management firm, highlighted a few stocks and Newmont Corporation (NYSE:NEM) was one of them. Here is what the fund said:
“The largest gold miner in the world, Newmont Corporation (NYSE:NEM) shares lost ground in what was a volatile and ultimately down quarter for the price of gold. The Colorado-based company has continued to execute well in what has been a challenging environment. The company recently reaffirmed its full-year 2021 production guidance, but indicated that it was likely to come in at the mid to low point of the range provided as a result of disruptions from Covid-19 as well as severe weather events. It also noted that inflation pressures were likely to push its costs higher in 2021. None of this changes our opinion of the stock, which has historically offered steady production anchored in good jurisdictions, a good pipeline of organic projects, a strong balance sheet and proven management.”
2. Barrick Gold Corporation (NYSE:GOLD)
Number of Hedge Fund Holders: 46
Barrick Gold Corporation (NYSE:GOLD) is a mining firm with prime interests in gold and copper. On April 13, the company announced that it would be investing close to $7 billion into the Reko Diq project in Pakistan over two phases. The Reko Diq contains the largest undeveloped copper and gold deposits in the world. Barrick expects to start production at the mines within the next five to six years. The project had been on hold since 2011 but was recently restarted after an agreement between the provincial and federal governments in Pakistan.
On March 9, Jefferies analyst Christopher LaFemina maintained a Hold rating on Barrick Gold Corporation (NYSE:GOLD) stock and raised the price target to $24 from $23, noting that there was increased conviction around the multi-year bull market for mining.
At the end of the fourth quarter of 2021, 46 hedge funds in the database of Insider Monkey held stakes worth $958 million in Barrick Gold Corporation (NYSE:GOLD), up from 41 the preceding quarter worth $917 million.
In its Q1 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Barrick Gold Corporation (NYSE:GOLD) was one of them. Here is what the fund said:
“Also within the structural bucket, we have selectively added to our commodity exposure with the purchase of Barrick Gold Corporation (NYSE:GOLD). Canadian mining company Barrick Gold is a play on operating improvements. The company has aggressively delevered its balance sheet and reduced capex spending to a lower level more permanently, directing its healthy free cash flow to dividends and buybacks.”
1. Freeport-McMoRan Inc. (NYSE:FCX)
Number of Hedge Fund Holders: 66
Freeport-McMoRan Inc. (NYSE:FCX) is an Arizona-based minerals and mining firm. On April 21, the company posted earnings for the first quarter of 2022, reporting earnings per share of $1.07, beating estimates by $0.15. The revenue over the period was $6.6 billion, up more than 36% year-on-year and beating expectations by $310 million. The firm expects to sell 4.25 billion pounds of copper, 1.6 million ounces of gold and 80 million pounds of molybdenum in fiscal year 2022, with capital expenditures during the time estimated at around $4.6 billion.
On April 5, Deutsche Bank analyst Abhi Agarwal kept a Hold rating on Freeport-McMoRan Inc. (NYSE:FCX) stock and raised the price target to $50 from $42, identifying increased copper price futures as one of the main reasons behind the target raise.
At the end of the fourth quarter of 2021, 66 hedge funds in the database of Insider Monkey held stakes worth $3.7 billion in Freeport-McMoRan Inc. (NYSE: FCX), the same as in the preceding quarter worth $3.2 billion.
In its Q4 2021 investor letter, Horizon Kinetics LLC, an asset management firm, highlighted a few stocks and Freeport-McMoRan Inc. (NYSE:FCX) was one of them. Here is what the fund said:
“Those were some ideas about copper demand. Here are some specifics about supply. Global copper mine production in the 10 years from 2005 to 2015 rose 2.45% annually. In the next 5 years, to 2020, it increased by only 0.9% annually. Even ignoring the 2020 pandemic year, for the 4 years from to 2019, the expansion rate was 1.66%. We already have the historical context for this: the commodity price collapse prior to 2015, from a position of excess capacity.
What producers must do in that situation, because they have high fixed costs and debt expense, is curtail their exploration and development expenditures and reduce operating costs. They rely on existing mines, instead, and on their highest-grade ores and lowest-cost production. They might not actually reduce current production, but they aren’t replacing the reserves that are being slowly drawn down. You can see this at work at the individual company level.
Freeport-McMoRan Inc. (NYSE:FCX) will illustrate. It is the world’s third-largest copper producer, closely following Chile’s Codelco and Australia’s BHP Group. In 2014, even though Freeport sold more copper than the prior year, its revenues dropped by over 25%, and it went from $4.8 billion of operating earnings (a 22% margin) to a $(0.2) billion loss. The company’s capital expenditures peaked in 2014 at $3.86 billion and will be about $1.72 billion in 2021, meaning the company is spending 55% less now than it was seven years ago. In inflation-adjusted terms, it’s spending 61% less today than seven years ago…” (Click here to see the full text)
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