We recently compiled a list of the 10 Best Gold Stocks to Buy According to Reddit and Robinhood. In this article, we are going to take a look at where B2Gold Corp. (NYSE:BTG) stands against the other gold stocks.
Regarded as a safe investment option, hedging investors against inflation, Gold has been a highly demanded precious metal historically. As such, in 2023, the precious metal’s demand soared by 3% year-over-year (YoY), hitting the 4,899 tons mark. This is on the back of growing demand from emerging markets like India and China, who were responsible for 75% of this demand. This ever-increasing trajectory of demand is expected to continue in the current year as well which is going to be discussed below.
Amidst the inflationary state in the U.S. for the past while, and the resulting uncertainty in the market, gold has seen its prices rise in 2023, reaching its all-time high, on the back of 13% increase. The increase in demand mainly came from central banks, the industrial sector, and investors. A trend was also observed in 2023, wherein the global sovereign wealth funds were reported to be increasing their holdings in the precious metal.
The price of gold is a complex mechanism, as it is impacted by several factors like demand, market stability, and interest rates, to name a few. Nevertheless, several analysts are looking to a positive future for gold, as they expect the prices to be sitting somewhere between $2,421.00 and $2,651.00 (per ounce rate) by the current year end, as compared to its current price of $2374.31, as of writing this article.
This trend is also shaping up on the back of the Fed’s plans for a rate cut later in the year, as the gold prices usually have an inverse relationship with the market interest rate. As such, the rate cut that is expected to occur somewhere in September is also helping analysts forecast the precious metal’s price increase in 2024.
Following is what was spoken about the gold market by an analyst at PrimeXBT, Kathryn Davies, in June 2024:
“Gold has fallen from its all-time high of $2,222 after the SNB cut rates, boosting the USD. However, the gold price remains supported by the prospect of Federal Reserve rate cuts and a lower interest rate environment globally. Elevated geopolitical tensions and central bank purchases also keep demand high, and the price supported. As a result, Gold could see more all-time highs as we progress through 2024, rising to $2400 by the year’s end.”
In terms of the global market, China is a crucial player in the gold market – China is not only the largest producer of gold (producing 12% of gold in 2023), but also the largest consumer of gold, with its central bank, on its own, buying 225 tons of gold in 2023, up from 62 tons in the previous year. Analysts have attributed China’s massive buying of gold to the freezing of Russian assets by the U.S. and its allies, which China is attempting to hedge itself from by buying Gold – pushing up the gold prices by doing so.
Australia and Russia closely follow China in the gold production game; in 2023, China, Russia, and Australia recorded a gold production volume of 375 tons, 325 tons, and 314 tons, respectively. The U.S. was placed 5th on the same list created by Insider Monkey, with a production volume of 173 tons! To date, 209,000 tons of gold have been mined across the globe, equaling a value of massive $12 trillion!
Having discussed the expected future of gold prices, it’s time we explore the world of gold stocks, which directly correlate with the gold price trajectory. Thus, let’s now jump to our list of 10 Best Gold Stocks to Buy According to Reddit and Robinhood.
Methodology
Extensive research across the Reddit discussion forums, along with the Robinhood Index, helped us in curating our preliminary list of all the stocks discussed across the two sources. Based on the analysts’ sentiment regarding each stock across both sources, we assigned the Reddit score and Robinhood score to the stocks and ranked them based on the average score, which we will refer to as the Overall score. Lower the score, better the ranking of stock. For stocks with an equal Overall score, we used Reddit score as the tiebreaker.
The overall score was derived from the number of upticks on Reddit forums against the respective stocks, and the number of analysts assigning buy ratings to the respective stocks on Robinhood. We also peeked into Insider Monkey’s database that tracks the activity of 920 hedge funds, wherein we collected information about the hedge fund investors’ holders of all these stocks to reaffirm the respective stocks’ sentiment across the two sources.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Aerial view of a gold mine in Mali, showing the scale of the mining operations.
B2Gold Corp. (NYSE:BTG)
Overall Score: 7
Reddit Score: 6
Robinhood Score: 8
Number of Hedge Fund Holders: 19
B2Gold Corp. (NYSE:BTG) is the 11th biggest Canadian mining company with revenue figures of $1.93 billion in the year 2023, also successfully making it to our list of Best Gold Stocks to Buy According to Reddit and Robinhood. B2Gold Corp., headquartered in Vancouver, Canada, is a gold producer with its operations based in Mali, Namibia and the Philippines; on the other hand, it has the Goose Project under construction in northern Canada, and several other development and exploration projects in various countries including Mali, Colombia and Finland.
The company recorded adjusted EPS of $0.06 (beating analysts’ estimates) on the back of gold production of 225,716 ounces in Q1 2024, in line with the company’s guidance. Moreover, the company’s liquidity position is placed quite well with the company recording a working capital of $629 million in the quarter. It is further bolstered by the company’s cash and cash equivalents balance of $568 million, which was up because of an increase of $507 million in operating cash flows. Acting as a cherry on top, the dividend was also declared in the quarter, worth $0.04.
On top of that, the company has penned an agreement with Sandbox Royalties in June 2024, giving birth to Versamet Royalties, a royalty company comprising of eight assets, which would result in a revenue stream worth $30 million by 2026, which would be an increase from these assets’ current revenue of $10 million. Furthermore, Gold production of somewhere between 860,000 and 940,000 ounces is expected to occur in 2024, which would be an increase from 590,243 ounces in 2023. Thus, analysts are expecting EPS to be around $0.26 per share this year from $0.01 per share in 2023, and the revenue is expected to jump to $2.52 billion in 2025 from the predicted revenue of $1.96 billion in 2024.
As such, the stock has seen an uptick of 20% in the last one month. Moreover, 11 analysts are giving out buy rating for the stock, setting the target stock price at $4.37, forecasting an upside of a whopping 40.5%!
However, it might be disturbing to see that the stock has experienced a 15.7% decrease in its share price in the last one year, during which it also experienced net loss in the last quarter of 2023, giving out an EPS of negative $0.09 per share. The timid performance was attributed to lower gold production and sales volume which were both down from 352,769 ounces and 339,355 ounces in Q4 2022 to 256,921 ounces and 270,611 ounces, respectively, in Q4 2023.
Nevertheless, 19 hedge fund holders have held interest in the stock, worth $127 million, in which First Eagle Investment Management holds the most of it, worth $71.4 million – believing in the potential of Versamet Royalties and resulting boost to company’s growth in coming years.
Overall BTG ranks 7th on our list of the best gold stocks to buy according to Reddit and Robinhood. You can visit 10 Best Gold Stocks to Buy According to Reddit and Robinhood to see the other gold stocks that are on hedge funds’ radar. While we acknowledge the potential of BTG as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BTG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.