Below you can find the list of the 5 best gold stocks according to the billionaire hedge fund. For a more comprehensive list, please see the 10 best gold stocks to buy now.
5. B2Gold Corp. (NYSEMKT: BTG)
The billionaire hedge fund continues showing confidence in the gold mining company B2Gold Corp. (NYSEMKT: BTG) over the past five years. B2Gold stake is valued at $275 million, accounting for 0.28% of the portfolio. It is the fifth-largest gold-stock investment of a billionaire hedge fund.
The Canada-based gold mining company operates three mines in Mali, the Philippines, and Namibia. Its shares soared 47% in the last twelve months. Jim Simons took the advantage of share price gains by selling 3% of the stake in the latest quarter. B2Gold Corp has generated 56% growth in the September quarter revenue from the past year period. The company offers a hefty dividend yield of 2.90%.
4. Kinross Gold Corporation (NYSE: KGC)
The gold mining company Kinross Gold Corporation (NYSE: KGC) has been a member of Renaissance Technologies portfolio since 2013. The gold mining company accounts for 0.39% of the overall portfolio valued at $393 million.
Kinross Gold’s share price has generated 60% growth in the last twelve months and shares are up 250% in the past five years. In addition to share price gains, the company also offers a dividend yield of 0.83%. Its adjusted earnings nearly tripled to $310 million in the latest quarter. Kinross expects substantial production growth over the next three years. Its September quarter revenue of $1.13 billion jumped 29% from the past year period.
“In September, we were pleased to announce an expected 20% increase in production over the next three years to 2.9 million gold equivalent ounces, along with plans for a quarterly dividend to return capital to our shareholders,” J. Paul Rollinson, President, and CEO said.
3. Newmont Corporation (NYSE: NEM)
The gold producer and explorer Newmont Corporation (NYSE: NEM) is the third-largest investment of Jim Simons, accounting for 0.51% of the overall portfolio. The company first initiated a position in a mining company during the third quarter of 2014. Newmont’s stake is valued at $508 million and it is the third-largest gold stock in Jim Simons portfolio.
Newmont reported record profits in the third quarter and its adjusted net income almost doubled to $697 million. The growth in gold prices helped Newmont in generating record financial numbers. Its share price grew by more than 40% in the last twelve months. Moreover, the company offers a dividend yield above 3%, with average five-year dividend growth of 20%. The company has recently increased its quarterly dividend by 60% to $0.40 per share.
“As demonstrated by our second dividend increase this year, with a 79 percent increase in January and a further 60 percent increase in October, I am confident that our world-class portfolio is best positioned to generate industry-leading value and returns for our shareholders,” said Tom Palmer, President, and Chief Executive Officer.
First Eagle is a NEM bull and talked about the stock in their Q2 investor letter. Here is what they said:
“Given what we view as a high-quality management team and robust balance sheet, Colorado’s Newmont is a prime example of a miner that was prepared to meet the challenges of Covid19. With rigorous protocols already in place, the company has been proactive in managing its mines to protect local communities and infrastructure while at the same time mitigating the pandemic’s impact on its business. In contrast with broad market trends that have companies cutting or suspending dividend payments, Newmont recently increased its quarterly dividend by 79%.”
2. Barrick Gold Corporation (NYSE: GOLD)
The world’s second-largest gold mining company Barrick Gold Corporation (NYSE: GOLD) is a member of Jim Simons stock portfolio over the last six years. It is also the second-largest gold-stock investment of a billionaire hedge fund valued at $603 million, accounting for 0.60% of the overall portfolio.
The shares of a Canada-based gold mining company jumped 30% this year. The hedge fund has sold 19% of Barrick Gold’s stake in the latest quarter to capitalize on share price gains. The company has recently raised the quarterly dividend by 12%, thanks to a strong gold price. Its dividends are safe as its third-quarter free cash flow hit a record level of $1.3 billion.
We shared Massif Capital’s detailed GOLD thesis in this article. Here is an excerpt:
“We entered Barrick Gold at an average price of roughly $10 a share in late 2018, and on the Friday before the firm announced its transformational merger with Randgold. Over the approximately two years that we held the position, not only did the price of gold rally dramatically, but the business itself produced excellent returns under a superior (dare we say the best?) management team in the gold industry. The position returned roughly 125% or 6.6% to the portfolio. Although this is a good return, the position was not without its challenges. The first challenge was sizing. We started the position small, with a roughly 3% portfolio weighting. We intended to add to the position, but we proved behaviorally incapable of adding to a position that had appreciated significantly.
This is a behavioral shortcoming that should not be dismissed simply because we made money and is without question a mark against us as investors. We are aware of it, though, and awareness will hopefully help us avoid making similar mistakes in the future.
The second challenge came at the time of closing out the position. Although we remain highly constructive on gold in general, we believed we needed to exit the position as our valuation for the company was between $20 and $25 per share at gold prices of around $1,500 to $1,600 an ounce. At our exit, the company was trading between 125% and 150% of the low end of our intrinsic value estimate. So although constructive on gold, and thus open to the possibility that a continued run in gold might take the stock higher on sentiment and momentum, we were concerned that the additional price appreciation was exposing us to the risk of needing to find a greater fool to sell the position to, if and when we wanted to exit.”
1. Franco-Nevada Corporation (NYSE: FNV)
Franco-Nevada Corporation is the largest gold stock holding of a billionaire hedge fund, according to the latest filings. It currently accounts for a 0.75% overall portfolio valued at $747 million. The firm has been holding Franco-Nevada shares since 2014.
Investment in Franco-Nevada has generated substantial returns for Jim Simons stock portfolio over the years. Shares of Franco-Nevada jumped 170% in the past five years on the back of improving financial numbers. The company also rewards investors through cash returns. Franco-Nevada has aggressively been expanding its asset portfolio to enhance its revenue base. It generated a record third-quarter net income of $0.81 per share, up 51% from the year-ago period.
We shared Horizon Kinetics’ detailed FNV bullish thesis here.
Please also see 12 Best Silver Stocks To Buy Now and 10 best high dividend stocks to buy now.
Disclaimer: None.
