We recently published a list of the 10 Best Canadian Stocks to Buy Under $10. In this article, we are going to take a look at where Sandstorm Gold Ltd. (NYSE:SAND) stands against the other Canadian stocks to buy under $10.
How are Canadian Stocks Performing?
The Canadian stock market had a positive third quarter, following a sluggish start earlier in 2024. The market was driven by domestic rate cuts and rebounding global markets. The BMO S&P 500 Index ETF, iShares Core S&P/TSX Capped Composite Index ETF, and iShares S&P/TSX 60 Index ET have surged over 33%, 20%, and 22% year-to-date, as of November 27.
If we talk about year-over-year headline inflation, it has cooled as per the Bank of Canada’s target rate of 2%. Hence, policymakers have cut rates four times consecutively and another 50 basis points cut is expected in December. The Bank of Canada’s benchmark lending rate stands at 3.75%, while economists are projecting a terminal interest rate of as low as 2%.
The managing director and head of macro strategy at Desjardins Group pointed out that the GST tax break from December 14 to February 15, 2025, will have a high fiscal multiplier, adding a noticeable boost to growth in the first half of 2025. The tax break is to increase consumer spending which has been severely impacted by interest rate increases and high debt levels since 2022. The tax break will allow consumers to buy essentials such as groceries, snacks, and kids’ clothing – all tax-free.
In the long run, the potential trade tariffs pose a wider threat to companies. The newly elected U.S. President Trump has vowed to impose a 25% tax on imports from Canada as well as Mexico. In 2023, the U.S. accounted for more than 75% of exports from Canada.
READ ALSO: Jim Cramer’s Latest Lightning Round: 11 Stocks to Watch and Jim Cramer on AMD and Other Stocks.
Canada’s Precious Metal and Mining Industry: The Real Deal
Some of the largest Canadian companies are involved in minerals and mining of rare earth metals, mainly engaged in gold and uranium exploration. Canada is also one of the largest producers of rare earth metals including Gold and Uranium. According to the World Gold Council, Canada was the fourth largest producer of gold with a total production of 192 tonnes in 2023. Are you interested in Gold Stocks to Buy Under $30? (Click Here)
In addition, Canada was the second largest Uranium producer in 2022, accounting for a total production of 7,351 tonnes, as per the World Nuclear Association. Cigar Lake was the largest operational highest-grade Uranium mine in northern Saskatchewan, Canada.
With that, let’s take a look at where Sandstorm Gold Ltd. (NYSE:SAND) ranks among the best Canadian stocks to buy under $10.
A close-up of a hand placing a block of gold into a safe.
Sandstorm Gold Ltd. (NYSE:SAND)
Number of Hedge Funds Holders: 18
Share Price as of November 27: $5.83
Sandstorm Gold Ltd. (NYSE:SAND) is a precious metals-focused streaming and royalty firm headquartered in Vancouver, British Columbia, Canada. Sandstorm focuses on acquiring royalties and gold alongside other metals purchase agreements from companies that have advanced-stage operating mines. The company owns more than 230 royalties, out of which 41 mines are producing.
During the third quarter of 2024, the company posted revenue of $44.7 million, up from $41.3 million in Q3 2023. The company’s net income was reported to be around $5.8 million compared to $0.01 million a year ago. Driven by strong commodity prices, Sandstorm Gold Ltd. (NYSE:SAND) generated record operating margins for the third consecutive quarter. In the next five years, the company expects significant growth with production to reach nearly 125,000 attributable gold equivalent ounces. This production outlook is solely based on streams and royalties that Sandstorm has purchased and paid for.
Sandstorm Gold Ltd. (NYSE:SAND) has reduced its debt from $640 million to $369 million and plans for further reduction, making its financial condition stronger. The company’s Greenstone project is on the verge of commercial production which would contribute significantly to its future production outlook.
Overall, SAND ranks 10th on our list of the best Canadian stocks to buy under $10. While we acknowledge the potential of SAND 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 SAND but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
