Even though the 2022 Deflation Act is in place, the markets may have a way of determining whether the plan is working or not. Not that it’s expected, but if the oil and gas markets become even more volatile than they already are — with Russia and Europe at odds — it’s worrisome if you think about the potential for higher prices.
This is perhaps the most obvious example of a reason to consider inflation hedging as part of a diversified investment plan. It does not appear that cryptocurrencies make good hedgers as some once predicted. The classic range of precious metals can become fashionable again under the right circumstances.
For those thinking along those lines, here are four publicly traded gold and silver miners that may be worth watching, especially when you see how much they’ve fallen — along with the price of gold and silver — since April. Are these bargains now?
Related: How to Invest in Gold
Newmont Corp. (NYSE: NEM ) is the largest of the stocks that count in the precious metals sector. When institutions decide to buy more gold and silver miners, this is likely to be first on their lists – it already owns about 85% of the traffic. With an average daily volume of 8.74 million shares, it’s the kind of liquidity the big companies like.
Newmont is global: it has operations and projects in North America, South America, Africa and Australia. Earnings per share (EPS) for this year is negative 58.1%. The EPS growth rate of the last five years is 39.3%. Equity is greater than long-term debt and the current ratio is 2.8. Newmont is trading at just 1.53 times its book value. The company pays a dividend of 5.28%.
This is exactly what the “Oversold” Relative Strength Indicator (RSI) is, according to the price chart below:
Buenaventura Mining Co. Inc. (NYSE: BVN ) is a Peruvian precious metals miner — the official name is Compania de Minas Buenaventura. The company now trades at a price-to-earnings ratio of 7 at about half its book value. Buenaventrua has been around for 68 years and became the first Latin American mining company to be listed on the New York Stock Exchange in 1996.
Earnings this year are up 187% and the five-year growth rate is 19.2%. Long-term debt greatly exceeds equity. The average daily volume is 1.6 million shares. Buenaventura pays a dividend of 1.29%.
based in Toronto Barrick Gold Corp. (NYSE: GOLD) has operations and projects across Canada, North America, South America and Africa. This is another one preferred by large institutional investors (when looking for precious metal miners) with an average daily volume of €21.49 million. Barrick trades at just above book value with a price-to-earnings ratio of 13.19. Profits for this year were down 13%. The five-year record is up 15.1%. This is another miner where equity exceeds long-term debt. The current ratio is 4. Barrick investors are paid a dividend of 2.7%.
SSR Mining Inc. (NASD: SSRM) is headquartered in Denver with operations in the United States, Canada, Mexico, South America and Turkey. This year’s profits are up 74.2%. The EPS growth rate over the last five years is 21%. The company’s long-term debt far exceeds equity. With a price-to-earnings ratio of 9.77 and trading in just 79% of its portfolio, SSR Mining could be considered a value stock. The dividend is 2.07%.
Any investor holding these stocks should keep a close eye on the monthly consumer price index and producer price numbers as this sector reacts to these measures.
See: How much is a gold bar worth?
Not investment advice. For educational purposes only.
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