We recently published a list of 11 Best Gold Mining Companies to Invest in Right Now. In this article, we are going to take a look at where Franco-Nevada Corporation (NYSE:FNV) stands against other best gold mining companies to invest in right now.
According to the World Gold Council’s annual report, robust central bank purchases and rising investor interest drove global gold consumption to a new high in 2024. The Council described central banks’ appetite for gold as “insatiable,” a significant turning point as purchases exceeded 1,000 tons for the third consecutive year. Gold investment grew by 25%, mostly due to gold exchange-traded funds, reaching a four-year high of 1,180 tons. Meanwhile, rising purchasing activity in China and India contributed to the continued strong demand for gold bars and coins.
Physical demand for gold is still low in key consumer markets, despite its impressive performance. China and India have seen a decline in purchasing demand due to record-high prices. Gold sales for January hit a 10-month low, according to the Perth Mint, while silver sales fell 61% from the previous month. This implies that although there is a high demand for investments, the retail and jewelry industries are under pressure from high prices. In light of the aforementioned factors, Citi kept its 6–12 month projection at $3,000, unchanged from the prior forecast, but updated its short-term (0–3 months) price target for gold to $3,000 per ounce from $2,800. Additionally, the bank raised its average price forecast for 2025 from $2,800 to $2,900 per ounce. The bank noted:
“We expect gold to continue to rise as a hedge against growth and other risks, including actual and perceived rising growth risks, including trade wars, still-high interest rates weighing on growth, continued deterioration in the U.S. labor market, ex-U.S. currency devaluation risks, and potential U.S. equity drawdown risks.”
Earlier in the first week of February, US President Donald Trump sparked a trade war by following through on his promise to put tariffs on China. Meanwhile, the President gave Mexico and Canada each a one-month respite. In that regard, the new government seems determined to follow through on its promises of imposing tariffs, casting a pall over global economic growth expectations. According to Ricardo Evangelista, senior analyst at ActivTrades, such an act increases the attraction of safe-haven gold. Speaking on this issue, in combination with January’s job market report, he added:
“I anticipate the data will confirm a slowdown in the U.S. labor market… this scenario would reinforce dovish expectations for the Fed and provide support for gold prices.”
Our Methodology
To come up with our list of the 11 Best Gold Mining Companies to Invest in, we scoured the VanEck Gold Miners ETF holdings, a fund that invests a significant percentage of its total assets in common stocks and depositary receipts of companies in the gold mining industry. From that list, we narrowed down stocks based on the hedge fund sentiments surrounding them. These stocks are ranked in ascending order based on the number of hedge funds that hold their shares.
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).
An aerial view of a large gold mine showing the extensive activity of natural resource extraction.
Franco-Nevada Corporation (NYSE:FNV)
Number of Hedge Fund Holders: 32
Franco-Nevada Corporation (NYSE:FNV) is a Canadian mining company that primarily focuses on gold royalties and streaming. The company’s business strategy is based on securing royalties and streams from mining activities, which generate consistent and predictable revenue.
The company’s latest revenue and earnings figures showed a range of results. Franco-Nevada’s sales of gold equivalent ounces decreased despite record gold prices driving up revenues, EBITDA, and profitability. This was mainly on account of the Cobre Panama mine stopping contributions. With a total of 445,000 to 465,000 GEOs expected to be sold, the company’s updated revenue projection for 2024 is now set between $1 billion and $1.1 billion.
Raymond James raised its price target for Franco-Nevada Corporation (NYSE:FNV) to $160 on January 27 from $158, while retaining an Outperform rating on the stock. The revision comes after Franco-Nevada Corporation (NYSE:FNV) signed a $300 million royalty deal to support Discovery Silver’s proposed acquisition of the Porcupine Complex. Raymond James emphasized the advantages of the royalties, which would provide immediate gold cash from the existing Porcupine Complex in Ontario.
Overall, FNV ranks 5th on our list of best gold mining companies to invest in right now. While we acknowledge the potential of FNV, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than FNV but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.