We recently published a list of 15 Stocks That Outperform the S&P 500 Every Year For the Last 3 Years. In this article, we are going to take a look at where Harmony Gold Mining Company Limited (NYSE:HMY) stands against other stocks that outperform the broader market.
Imagine choosing a group of stocks that not only weathered the market’s storm but also outpaced its peers. Clearly, a win. Such is the case of these 15 stocks that delivered returns greater than what the market had to offer over the last three years. Before we get down to those top-tier winners, let’s discuss what the broader market index actually is.
This may not be something new to seasoned investors. As one of the most widely known benchmarks of the United States, the S&P Index is considered the best gauge of notable American equities’ performance and the health of the economy, in general. Covering around 80% of market capitalization, the S&P is a float-weighted index, which means that the market capitalizations of all the companies included are adjusted by the volume of shares available for trading publicly. Since it’s an index, you can’t just invest in it directly, but rather you can invest in one of the many funds that use it as a benchmark and measure the overall performance.
As a research report by Alex Frino and David R. Gallagher stated:
“Over long horizons, index funds tracking the index consistently outperform the majority of actively managed funds, reflecting the efficiency of broad-market exposure.”
This highlights that S&P index funds generally deliver better results than most actively managed funds.
If we look at the 5-year trend for the broader market, the index witnessed a growth of around 105%. While this may be a decent growth rate, it’s not something truly amazing. The stocks in the index tumbled in 2022, mainly owing to the FED’s shift in monetary policy, the Russia-Ukraine war, and lingering post-COVID supply chain disruptions. Even after this period, the trendline is not something that would break records or catch an eye. In a span of 3 years, the stocks have witnessed a growth of 32%, which is just decent in this high-growth world.
From energy, agriculture, and finance to gold mining, automotive, technology, and construction industries, the companies have showcased strong returns in a short period. This is a result of favorable macroeconomic policies for these markets, particularly with Trump back in office. The stocks we have favored are the ones featuring good performance in the past, as well as the ones surrounding optimism in the future. Thus, we can safely say that it’s still not too late to invest in these stocks. As the elders used to say, “The best time to plant a tree was 20 years ago. The second-best time is now.”
Our Methodology
We have taken a list of 15 companies from Finviz and Yahoo Finance that have witnessed a growth rate of more than 32%, witnessed by the S&P index funds, over three years. These companies then have been listed in descending order, from the highest growth to the lowest growth. The trend line has been captured from Google’s latest stock prices, with respect to the returns of the respective shares.
At Insider Monkey, we are obsessed with hedge funds. 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
An open pit mine with heavy excavation machinery toiling away against the backdrop of a hidden valley.
Harmony Gold Mining Company Limited (NYSE:HMY)
3-Year Return as of the Close of March 12: 128%
Harmony Gold Mining Company Limited (NYSE:HMY) is a South Africa-based, as the name suggests, gold mining and exploration company. With a focus on exploration, extraction, and processing of mineral properties, the company mainly explores gold, uranium, silver, and copper deposits. The mining powerhouse has eight underground operations in the Witwatersrand Basin, an open-pit mine on the Kraaipan Greenstone Belt, and multiple surface source operations in South Africa. Incorporated in 1950, the company is dedicated to delivering safe performance and consistent production.
One of the largest gold mining companies recently delivered outstanding interim results, with increased production and reduced costs. However, the main contributor was a surge in gold prices. Harmony Gold Mining Company Limited (NYSE:HMY) concluded December 2024 with a net profit of $441M, compared to a net profit of $318M in the same quarter in 2023, highlighting a 23% year-over-year rise in average gold price.
The gold giant considers the acquisitions of Mponeng, Moab Khotsong, and Mine Waste Solutions, initiated in 2020, transformative for the company. With a more positive approach, the company is planning to invest in these high-yielding assets to extract as many benefits from these as it can. Since Phase II of Kareerand tailings storage facility expansion at Mine Waste Solutions is expected to be completed by the year’s end, we have something to look forward to.
This, along with the projects at Moab Khotsong and Mponeng, is anticipated to add a total of 5.2 million ounces of gold reserves and deliver an average recovered grade of about nine grams per tonne. Additionally, the much-awaited Eva Copper initiative is also progressing well, with only the final amendments now left. The project is expected to produce between 55,000 to 60,000 tonnes of copper per annum, along with 14,000 ounces of gold as a byproduct over its useful life of 15 years.
Analysts at CNN Business expect Harmony Gold Mining Company Limited (NYSE:HMY) to outperform the market over the next 12 months. The company has yielded around 90% more returns than the broader market in the last three years, so we can accept the analysts’ claim, particularly when management seems clear about how it plans to proceed.
Overall, HMY ranks 12th on our list of stocks that outperform the broader market. While we acknowledge the potential for HMY as an investment, our conviction lies in the belief that some 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 HMY 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.
