We recently published a list of 10 Best Gold Stocks Under $30. In this article, we are going to take a look at where Osisko Gold Royalties Ltd (NYSE:OR) stands against other best gold stocks under $30.
Gold mining is a global industry that operates on every continent except Antarctica, and gold is produced from mines of vastly varied forms and scales.
Gold has traditionally been used as a hedge against inflation and unstable economies. As per Joseph Cavatoni, senior market strategist of the World Gold Council, “Gold does well in moments of risk. If you look at market drawdowns or systemic events in the market, that’s when gold really shines.” Cavatoni suggested new investors choose between investments like gold-backed ETFs and real gold, which requires concerns like purity and storage. While real gold requires close attention to pricing and liquidity, exchange-traded funds (ETFs) provide accessibility and are frequently commission-free.
Gold prices have risen by more than 30% in October 2024, reaching a record-breaking high, boosted by the Federal Reserve’s recent half-point rate drop, geopolitical tensions, and economic uncertainties surrounding the US presidential election. China, India, and Turkey’s central banks have supported the price rise by lowering their reliance on the US currency, while the renowned retail giant Costco’s launch of 1-ounce gold bars has raised gold’s accessibility for individual investors.
According to David Meger, director of metals trading at High Ridge Futures, the heightened tensions between Russia and Ukraine are likely the most significant geopolitical factor influencing the gold market during the past several days.
Investors have witnessed financial gains as the global gold mining industry of the broader market has grown by 18.29% since the beginning of the year and by 31.29% in the past year. Meanwhile, the World Gold Council reports that record prices and strong investment flows helped drive a 5% year-over-year (y/y) growth in gold demand to 1,313 tonnes (t) in Q3 2024. The average LBMA gold price increased 28% yearly to a record $2,474 per ounce.
For the seventh straight quarter, OTC investment nearly quadrupled to 137 tonnes. Demand for technology-related gold increased 7% year over year to 83 tonnes, propelled by AI breakthroughs. While recycled gold volumes rose 11% year over year, mine production jumped 6% year over year to a record 990 tonnes, and no widespread distress selling was seen.
Demand was significantly increased by the recovery in ETF inflows, which reached 95 tonnes. Key drivers included portfolio diversification, geopolitical uncertainties, and declining interest rates. Despite a 9% year-over-year reduction brought on by market-specific variables, bar and coin investment stayed strong at 269 tonnes.
The projection for 2024, as per the World Gold Council, calls for healthy professional flows and consistent bar and coin investment to offset slowing central bank buying and declining consumer demand.
On the other hand, as per Bloomberg, on November 21, 2024, Samantha Dart, co-head of Global Commodities Research at Goldman Sachs, stated central bank purchases are raising the price of gold. She forecasts that the price of gold will reach $3,000 per ounce by the end of 2025.
Our Methodology
For this article, we first used a Finviz stock screener to list down all the gold stocks trading under $30 (as of the writing of this article) with over 40% institutional ownership. From the resultant dataset, we chose the 10 best gold stocks with the highest upside potential. The stocks are ranked in ascending order of their upside potential as of November 18.
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 golden nugget illuminated under direct lighting, hinting at the value of precious metals.
Osisko Gold Royalties Ltd (NYSE:OR)
Upside potential as of November 18: 15.67%
Share Price as of November 18: $19.02
Osisko Gold Royalties Ltd (NYSE:OR) acquires and manages high-quality royalties, streams, and other interests. The company’s portfolio includes royalties, streams, offtakes, options on royalties and stream financings, and the sole right to take part in royalties and stream financings on a variety of projects in the future. The company’s portfolio includes 20 producing assets, led by the Canadian Malartic Complex, one of Canada’s largest gold mines.
Osisko Gold Royalties Ltd (NYSE:OR) operates in two segments, i.e., acquiring and managing precious metals and other royalties, streams, and other interests, and the second one is the exploration, evaluation, and development of mining projects. The majority of its revenue comes from North America, although it also receives some portions of sales from South America, Australia, Africa, and Europe.
In Q3 2024, Osisko Gold Royalties Ltd (NYSE:OR) reported operating cash flows of $47.2 million, an 8.60% increase over Q3 2023. Adjusted earnings of $28.8 million and net earnings of $18.3 million, which marked a substantial increase over the net loss in Q3 2023, were important figures. Despite varying revenues, the company achieved strong profitability by maintaining a solid cash margin.
The balance sheet was strengthened by Osisko Gold Royalties Ltd (NYSE:OR)’s repayment of $27.3 million under its revolving credit facility. The company strategically positioned itself for long-term asset expansion by securing a royalty deal on the Dalgaranga Gold Project and a gold stream agreement with SolGold.
The management expressed optimism about future output improvements, especially from the Namdini gold project and the Mantos Blancos mine, which should increase delivery of gold equivalent ounces starting in 2025. This is in line with Osisko Gold Royalties Ltd (NYSE:OR)’s plan to increase productivity and maintain expansion.
Overall, OR ranks 10th on our list of best gold stocks under $30. While we acknowledge the potential of OR, 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 OR 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.
