A challenging stock market in 2022 — and the likelihood of persistently high inflation in 2023 — has many investors looking for gold stocks to buy to hedge their portfolios.
Granted, there’s already some pressure on the price of gold, which is down about 2% in 2022. The Federal Reserve’s moves to raise interest rates strengthened the US dollar, but using gold as an inflation hedge is still a good idea.
A slowdown in the economy and tightening of monetary policy could lead to stagflation. That’s a scenario that would boost gold prices and gold stocks even if the larger stock market suffered.
But to get the best profit in this hedge-worthy scenario, you need to know what are the top gold stocks to buy. That’s where my free portfolio grader tool comes in.
The Portfolio Grader grades stocks based on qualitative and momentum metrics, such as earnings history and surprises, analyst sentiment, and buying pressure. Then it gives each stock a grade on a scale of “A” to “F” — and like in school, the best stocks to buy deserve better grades.
Here are some top gold stocks to buy for investors looking to hedge their portfolios now.
|BVN||Compania de Minas Buenaventura SAA||$8.32|
|IDR||Idaho Strategic Resources||$5.81|
|IAUX||i-80 gold corp||$2.94|
Hycroft Mining (HYMC)
If that’s what you were hoping for Hycroft mining (NASDAQ:HYMC) was going to be the latest hot meme stock, then you were disappointed in this gold digger. But that doesn’t mean Hycroft is a bad company. In fact, it remains one of the best gold stocks to buy at this point.
Hycroft stock, now priced at less than $1 a share, is down 69% from its March peak. But it’s still showing a 17% gain in 2022 and will end the year in a stronger position than it started. Hycroft also has significant resources at its northern Nevada mining site with an estimated 9.5 million available ounces of gold and 456 million ounces of silver.
Third-quarter revenue was $8.76 million, down 72% year over year. But the company has also managed to clip its losses, cutting them from 39 cents a share a year ago to just 8 cents a share.
This helps give HYMC stock a “B” rating on my Portfolio Grader.
MP Materials (MP)
headquartered in Las Vegas, MP materials (NYSE:MP) operates the Mountain Pass Mine, the only rare earth mine and processing facility in the United States
Rare earth mining processes materials such as lanthanum, cerium, neodymium and praseodymium, which are used to manufacture products such as rechargeable batteries, electric vehicle motors, mobile devices and wind turbines. The Mountain Pass facility is responsible for approximately 15% of the world’s rare earth mining operations.
MP stock is down 31% so far this year but has held its ground in the most recent quarter when it posted a mere 2% loss. The company consistently beats expectations with its quarterly earnings. For the third quarter, it reported revenue of $124.44 million and earnings of 36 cents per share. Analysts were expecting revenue of $118.1 million and earnings per share of just 30 cents.
The MP share has a “B” rating in the Portfolio Grader.
Compania de Minas Buenaventura SAA (BVN)
Compania de Minas Buenaventura SAA (NYSE:BVN) is a Peru-based precious metals company. Peru ranked seventh in the world for gold mine production in 2021, producing more than 127 tons.
BVN is up more than 50% over the past three months, but the stock is still relatively cheap. It costs less than $10 and has a price-to-sales ratio of just over 3.
Earnings for the third quarter were $195.42 million, beating analysts’ expectations of $183 million. But the company also reported an 8 cents per share loss in earnings, while the Street only expected a 2 cents per share loss.
BVN believes it has sufficient gold, silver and copper reserves at its mines to sustain operations for at least the next 20 years.
The stock has a “B” rating on the Portfolio Grader.
Gold Fields (GFI)
goldfields (NYSE:GFI) has a global presence with offices in its home country of South Africa, as well as in Australia, West Africa, Ghana and Peru.
GFI stock took a huge leap in November, jumping 40% after announcing it was abandoning its bid to buy a Canadian company Yamana Gold (NYSE:AUY) after Yamana backed a competing $4.8 billion takeover bid Agnico Eagle mines (NYSE:A.E.M) and Pan American Silver Corp. (NASDAQ:PAAS).
Gold Fields announced in May that it had made a $6.7 billion bid to buy Yamana in an all-stock transaction, but the valuation dropped about $2.3 billion when investors began asking GFI – Stocks for sale.
Now that it’s removed the Yamana drag on its share price, Gold Fields looks more attractive — especially if gold prices can rally back to $2,000 an ounce, as it did earlier in the year.
The company’s second-quarter revenue was $1.12 billion, up more than 12% year over year. GFI stock has a “B” rating on the Portfolio Grader.
Idaho Strategic Resources (IDR)
While MP Materials is on ban on U.S. production of rare-earth materials, that could potentially change. Idaho Strategic Resources (NYSEAMERICAN:IDR) is in the exploration phase for rare earth element materials in its mines.
On December 1, the Company announced that it had increased its position in Idaho’s Rare Earth Thorium Belt to more than 11,000 acres.
In a letter to shareholders, the company said its holdings in gold and rare earths are “of equal importance” and that its rare earths and thorium businesses hold “almost immeasurable blue sky potential.”
The potential for IDR stocks is unmistakable as Washington works to wean the US off Chinese rare earth materials. And that contributes to its “B” rating in the Portfolio Grader.
i-80 gold corp (IAUX)
Based in Nevada, i-80 gold corp (NYSEAMERICAN:IAUX) has a market cap of just $700 million. But it has big ambitions that should bring solid returns to investors.
The company, which only went public on the New York Stock Exchange on May 19, is ramping up drilling at its Ruby Hill property in Eureka County, Nevada, and said drilling there “has really exceeded expectations.”
The Ruby Hill mine has gold, gold-silver and polymetallic deposits. The National Bank opened coverage with an “Outperform” rating for the stock, which is up 77% over the past month.
The Company reported gold sales of 9,332 ounces for the third quarter and 14,328 ounces for the year to date. Revenue for the quarter was $16.01 million with an operating loss of $12.25 million.
IAUX stock has a “B” rating in the Portfolio Grader.
Solitario Zinc Corp. (XPL)
Based in Wheat Ridge, Colo. Solitaire Zinc (NYSEAMERICAN:XPL) has two primary zinc mining partnerships in North America. There is a partnership with Nexa Resources (NYSE:NEXA) to operate the Florida Canyon Zinc Project and is collaborating Teck Resources (NYSE:TEC) to operate the Li Zinc Project in Alaska.
The Company also has an exploration project in Peru with hopes of expanding it into a multi-asset intermediate resource company.
In November, Solitario announced that it had discovered a new area of potential gold and silver deposits in South Dakota, where it was expanding its position.
XPL stock is up nearly 10% over the past three months. It has a “B” rating on the Portfolio Grader.
At the time of publication, Louis Navellier held a long position in MP. Louis Navellier had other positions (neither directly nor indirectly) in the securities mentioned in this article.
The InvestorPlace researcher primarily responsible for this article has had no position (directly or indirectly) in the securities mentioned in this article.