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 Barrick Gold Corporation (NYSE:GOLD) 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).
A miner examining yellow gold ore in a mine shaft, symbolizing the company’s exploration process.
Barrick Gold Corporation (NYSE:GOLD)
Overall Score: 1
Reddit Score: 1
Robinhood Score: 1
Number of Hedge Fund Holders: 51
With $11.4 billion in revenue recorded in 2023, Barrick Gold Corporation (NYSE:GOLD) is the top 11th mining company in the world by revenue, operating in over 13 countries, primarily engaged in producing copper and gold.
In Q1 of 2024, the YoY net earnings per share of the company rose 143%, while the adjusted EPS of $0.19 per share (up from $0.14 in Q1 2023) beat the analysts’ estimate as well. Moreover, the EBITDA margin was up 5%, reaching 41%, whereas the cash flow position of the company stands firm as well, with its operating cash flow amounting to $760 million. The company has attributed this performance to higher gold prices in the quarter, along with successful ramp up of Goldrush mine.
The latest development in the company’s assets is regarding the new Goldrush mine at Cortez which got underway, and expects an initial ramp up production of 130,000 ounces in 2024, which would eventually hit 400,000 ounces market by 2028. Barrick owns 61.5% of the share in the mine. With rapid developments taking place at Goldrush mine, along with other projects, and post its Q1 earnings announcement, the stock has gained 14% in the last one month!
This growth seems to continue for the stock, as the company has reported Q2 production of 948,000 ounces of gold, up from 940,000 ounces of gold recorded in Q1 2024. This was on the back of higher production at Turquoise Ridge, Porgera, Tongon, North Mara and Kibali. Furthermore, the market price of gold recorded by the company in Q2 is even higher at $2,338 per ounce; thus, the company’s guided production increasing every quarter for this year, and with the increasing gold prices, along with decreasing costs, the company’s growth looks crystal clear in the quarters to come.
Furthermore, the dividend policy is one in favor of the investors as well, as it offers a dividend yield of 2.3% while paying out an annual dividend of $0.4, which helped it bag a place in the list of best dividend stocks. Another plus point of this stock is the company’s engagement with tier-1 mining assets, which squeeze in profits even in times of low prices, due to cost efficiency. Moreover, the stock is carrying an upside of an impressive 25.26%, while 74% of the Robinhood analysts are giving out buy ratings for the stock.
The company is looks to be going smooth in meeting its full-year production guidance of copper and gold, hence, we are in for a continued organic growth of the stock in the rest of the year.
Overall GOLD ranks 1st 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 GOLD 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 GOLD 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.
