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 Sandstorm Gold Ltd. (NYSE:SAND) 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 panoramic view of a gold mine, highlighting the company’s global mining operations.
Sandstorm Gold Ltd. (NYSE:SAND)
Overall Score: 7
Reddit Score: 7
Robinhood Score: 7
Number of Hedge Fund Holders: 16
With its operations based in several countries, including Canada, Mexico, the U.S., to name a few, Sandstorm Gold Ltd. (NYSE:SAND) is a gold royalty company that gets the right to a share of mine’s gold production against the company’s upfront funding to the miners to acquire the mine. The company has acquired 230 royalties on mining projects that span across the globe.
The company reported a decrease in its revenue and income for the 1st quarter of 2024, wherein it reported a revenue of $42.8 million against $44 million in the 1st quarter of 2023, and a net loss of $3.9 million against a net income of $15.6 million in the period a year ago. The company associated this quarterly downfall to 12% reduction in the gold equivalent ounces (GEO) sold, a decrease of $10 million in its other income pertaining to royalty payment, and an incurred loss through fair value assessment of one of its debentures investment.
Nevertheless, Sandstorm Gold Ltd. (NYSE:SAND) has experienced a share price appreciation of 4.5% since the last month, and a sweet 10.71% on the year-to-date (YTD) basis. Moreover, the analysts eye the share price to keep climbing, expecting it to reach $7.44 from its current price of $5.58, which would be an upside of a staggering 33.3%! Plus, the popularity of the stock has also grown since the last quarter amongst the hedge fund holders, as the number has increased by four, taking the total tally to 16, who hold an investment of $72.4 million, as of Q1 2024.
Horizon Asset Management and Sprott Asset Management are two hedge funds with greatest investment values of $23.3 million and $2.8 million, respectively. Moreover, over nine analysts at Robinhood are giving a buy rating of the stock.
The company has also penned a deal in May 2024 (to be completed in 2nd quarter of 2024), worth $21 million with Evolve Strategic Element Royalties, selling its several non-precious metal royalties, proceeds of which it plans to use to repay its debt, hoping to solidify its liquidity and cashflow position.
Moreover, the analysts at Reddit are keeping their eyes hung up on one of the company’s holdings, Platreef mine in South Africa, which would bolster the company’s production further, once it becomes operational. With the gold production forecasted to be somewhere between 75,000 and 90,000 in 2024, and 125,000 within the next five years, this is stock is one to keep an eye out on, hence, also making it to our list of Best Gold Stocks to Buy According to Reddit and Robinhood.
Overall SAND ranks 6th 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 SAND 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 SAND 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.
