We recently compiled a list of the 10 Best Breakout Stocks To Invest In Right Now. In this article, we are going to take a look at where Newmont Corporation (NYSE:NEM) stands against the other breakout stocks.
Since 1950, the S&P 500 has posted at least a 15% gain through September on 17 occasions. In those years, the index rose a median of 5.4% in the fourth quarter and ended the year with gains in all but three instances, according to Keith Lerner, co-chief investment officer at Truist Advisory Services. Strong gains in U.S. stocks this year suggest a positive outlook for the remainder of 2024, if historical trends hold.
The S&P 500 is currently up 20% year-to-date, nearing a record high and poised for its best January-to-September performance since 1997. Optimism around a potential ‘soft landing’ has fueled this rally, alongside a recent 50 basis point rate cut by the central bank.
Overall, inflation in the U.S. is steadily nearing the Federal Reserve’s 2% annual target. Analysts suggest that the ongoing moderation in consumer prices could prompt further interest rate cuts to prevent a spike in unemployment. The personal consumption expenditures price index, a key inflation measure monitored by the Fed, increased by just 0.1% in the past month. This brings the 12-month inflation rate to 2.2%, down from 2.5% in July, marking its lowest level since February 2021. Moreover, Fed officials have seem to have shifted their focus from combating inflation to prioritizing support for a labor market showing signs of slowing. During their recent meeting, policymakers signaled the possibility of a half-percentage-point cut this year, followed by a full-point reduction in 2025.
That said, the current financial landscape reflects the Fed’s cautious strategy to engineer a soft landing for the economy—curbing inflation without inducing a recession. Gregory Daco, Chief Economist at EY-Parthenon, observes that the U.S. economy is gradually decelerating, with both consumers and businesses adopting more cautious spending behaviors due to a tightening labor market and rising costs. Although consumer spending hasn’t seen a sharp decline, Daco suggests that slower growth in disposable income could lead to more subdued spending in 2025. He projects consumer spending growth to slow to an average of 2.5% in Q4 2024, dropping further to 2% in 2025.
On another front, Mark Spitznagel, Chief Investment Officer and founder of Universa, believes the U.S. is on the brink of a significant downturn due to the high levels of debt and sustained high interest rates. “The clock is ticking, and we are entering black swan territory,” he told Reuters, warning that the recent “disinversion” of a key segment of the U.S. Treasury yield curve—a crucial recession indicator—signals an impending sharp downturn. Spitznagel anticipates a recession could hit as early as this year, prompting the Fed to slash rates aggressively from the current 4.75%-5% range and potentially returning to quantitative easing (QE), or bond buying.
Our Methodology
To compile our list of the best breakout stocks, we analyzed the holdings of the IBD Breakout Opportunities ETF and ranked them based on the number of hedge funds that initiated long positions in Q2 2024. From this group, we identified the top breakout stocks that are the most widely held by hedge funds.
At Insider Monkey, we are obsessed with 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 gold mine entry with a conveyor belt transporting minerals from the depths of a shaft.
Newmont Corporation (NYSE:NEM)
Number of Hedge Fund Holders: 61
Newmont Corporation (NYSE:NEM) is the world’s largest gold producer, also engaged in mining copper, silver, zinc, and lead. The company operates in key mining regions across Africa, Australia, Latin America and the Caribbean, North America, and Papua New Guinea.
Recently, Newmont Corporation (NYSE:NEM) announced its agreement to sell certain Australian assets to Greatland Gold plc, with the transaction expected to finalize in the fourth quarter of 2024. This sale includes the Telfer operation and Newmont’s 70% stake in the Havieron gold-copper project, which is projected to generate up to $475 million for the company. As a result of this sale, Newmont Corporation (NYSE:NEM) has adjusted its non-core gold and copper production guidance for 2024, although its Tier 1 gold production target remains unchanged at 5.63 million ounces.
Jefferies has maintained its Buy rating on Newmont Corporation (NYSE:NEM) with a price target of $54. The firm noted that the recent transaction exceeds Jefferies’ own valuation of $271 million. The deal encompasses various elements, including equity, deferred cash, and repayment of a joint venture loan.
In its Q2 2024 results, Newmont Corporation (NYSE:NEM) reported revenue of $4.4 billion, fueled by the production of 1.6 million ounces of gold and 477,000 gold equivalent ounces from other metals. This led to robust cash flow of $1.4 billion from operations and $594 million in free cash flow.
As of the end of the second quarter, 61 hedge funds monitored by Insider Monkey held stakes in Newmont Corporation (NYSE:NEM).
Overall NEM ranks 4th on our list of the breakout stocks to invest in. While we recognize the potential of NEM as an investment, we believe certain deeply undervalued AI stocks offer greater prospects for higher returns in a shorter period. If you’re seeking an AI stock with even more promise than NEM and trading 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.
