Stock Investor Insights: Six Precious Metals Stocks to Buy for Protection

You are receiving this email because you signed up to receive our free e-letters, or you purchased a product or service from its publisher, Eagle Financial Publications. Six Precious Metals Stocks to Buy for Protection 10/08/2024 [Sponsored Content [Hidden stock signal leads to massive gains?](]( Investing Daily's trading expert Jim Fink has developed a system that consistently pinpoints a specific signal every stock sends out before it moves. Then he uses that advanced knowledge to multiply even the smallest of gains into 100% winners, 117% winners... even 203% winners. Over and over again. [Click here for the lucrative details.]( [Click Here...]( Six precious metals stocks to buy for protection feature a silver miner that earned the top recommendation in that category from BofA Global Research. The six precious metals stocks to buy for protection from inflation, economic downturns and geopolitical risk offer investors potential paths to profit even when risks arise. The BofA commodities team remains bullish on silver and gold, forecasting that the latter can hit $3,000 per ounce in the next 12-18 months. The BofA analysts opined that precious metals prices were held up due to the need for a Federal Reserve rate cut to spur an influx of non-commercial buyers like central banks around the world. As the market priced in a rate cut, gold rallied to many all-time new highs in the third quarter of 2024. While stimulus from China’s government could strengthen the outlook for global growth and potentially reduce the likelihood of increasing Fed rate cuts, other factors that can further spur precious metals prices. Ongoing central bank purchases are one such important factor, and a push to reduce the share of the U.S. dollar in foreign exchange portfolios will likely drive increased precious metals purchases from central banks. Continued buying of gold by increasingly wealthy Chinese consumers who also may view gold as a sensible diversifier in real estate-oriented investment portfolios, could support the price of the precious yellow metal, too. Demand from India also has helped to buoy gold prices. Six Precious Metals Stocks to Buy for Protection: Pan American Silver Pan American Silver (NYSE: PASS) is a Vancouver, Canada-based mining company that focuses on silver and gold. It operates mines in Canada, Mexico, Peru, Brazil, Bolivia, Chile and Argentina. BofA regards the company as its top silver recommendation. The company also owns the Escobal mine in Guatemala that is currently not operational. It further holds interests in exploration and development projects. Pan American Silver has been operating in the Americas for three decades. BofA’s price objective for Pan American Silver is $28.00, and is based on the stock trading at 1.25x the investment firm’s estimated net asset value (NAV) on a net investments-adjusted basis. The investment firm estimated NAV for PASS based on a 5% discount rate. Historically, North American precious metal stocks have traded between 1 and 3 times NAV, with silver producers generally selling at a discount to gold producers. Chart courtesy of [www.stockcharts.com]( BofA’s price objective could be topped if commodity prices exceed forecasts, a change occurs in the regulatory/permitting environment in the Chubut province of Argentina where Pan American's dormant Navidad project is located, operating results beat expectations and capital costs are reduced, BofA wrote. Risks to Pan American Silver reaching the BofA price goal could unfold from unforeseen operating issues, heightened capital costs, commodity prices dipping under forecasts and regulatory woes such as environmental and permitting hurdles, or new taxes causing a short fall in financial results. Pan American Silver Corp. turned into a successful buy recommendation in the [Fast Money Alert]( trading service led by Mark Skousen, PhD, and Jim Woods, a seasoned market maven. The duo recommended PASS on August 27, 2019, advised its sale on February 27, 2020, and produced a profit of 24.43% on the stock in just six months. Ben Franklin scion Mark Skousen, who heads [Fast Money Alert]( and [Forecasts & Strategies]( talks to Paul Dykewicz. As a trading service that recommends both stocks and options, [Fast Money Alert]( also instructed its subscribers to buy related January 17, 2020, call options. By the time they advised taking profits, the call options had soared 110.45% in just 125 days. Jim Woods, a ex-U.S. Army paratrooper, leads [Successful Investing]( and co-heads [Fast Money Alert](. Six Precious Metals Stocks to Buy for Protection: Agnico Eagle Mines The No. 1 gold recommendation of BofA is Agnico Eagle Mines Ltd. (NYSE: AEM), a Toronto, Canada-based company. Agnico Eagle Mines is one of the gold mining stocks that gained a lift after the Federal Open Market Committee's (FOMC) Sept. 18 Fed Funds rate cut of 0.50%, equaling 50 basis points. Prognosticators expect cuts totaling 50 basis points between the remaining two FOMC meetings this year, 100 basis points in 2025 and 50 basis points in 2026 to reach a rate of 2.9% that may hold through 2027. Some [experts suggest investors have 5-10% of a given portfolio invested in gold](. A key reason is that gold acts as an insurance policy for a portfolio, since when everything else goes down, gold tends to go up. Even though gold is unlikely to produce the stellar returns of a high-flying technology stock, it typically minimizes the downside if a market bubble pops, a geopolitical crisis hits, or some other market catastrophe occurs. The dollars invested in gold mining stocks also can provide investors with dividend payouts. The potential upside is a key reason for compiling a list of the best [dividend-paying]( precious metals stocks to buy for protection from an array of risks. Agnico Eagle Mines has gold mining operations in Canada, Finland, Australia and Mexico. The mining company’s exploration and development activities also extend to the United States. The mining company has full exposure to rising gold prices consistent with its policy of no-forward gold sales. Citigroup wrote in a recent research note that it forecasts AEM’s 2024 estimated earnings before interest, taxes, depreciation and amortization (EBITDA) to climb 1% to $4.6 billion. The mining company's 2025 estimated EBITDA remains flat at $5.8 billion. The price target that Citigroup has set for AEM is US$80 per share, based on 1.2x price/NAV multiple and Citi’s bullish view on gold prices. Re-investment going forward should climb as projects are built to offset depleting marginal assets, but capital intensity appears relatively modest, Citigroup analysts wrote. The Citi Commodity team remains bullish on gold with its price estimate of $2,400 per ounce in 2024 already exceeded. For 2025, Citi foresees gold prices reaching about $2,900 per ounce, materially increasing earnings estimates even with elevated costs. Chart courtesy of [www.stockcharts.com]( The [Fast Money Alert]( trading service also helped its subscribers profit handsomely by recommending AEM options and stock for just two months earlier in 2024. The options soared 144.29%, while the stock price climbed 21.03% before the trading service leaders recommended taking profits. [[Have You Seen This $11 Trillion 'Tech Strip?']( While many folks today are wondering what to do with their money… a revolutionary “sheet” of new technology has quietly sparked an $11 trillion tech revolution. Investors who get in FIRST have a rare chance to position themselves in front of a tsunami of profits. [Click here to see how anyone can profit fast.]( [Click Here...]( Six Precious Metals Stocks to Buy for Protection: B2Gold Corp. Vancouver, Canada-based B2Gold Corp. (NYSE: BTG; TSE: YBTO) received a price objective of US$3.85/C$5.20, based on the stock trading at 1.00x the estimated net asset value BofA Global Research projected for the miner. Historically, North American precious metal stocks have traded between 1.0x and 3.0x NAV and between 1.0x and 2.0x more recently with a median of 1.25-1.50 times, with unhedged, growth-oriented producers in the upper-end of the range. BofA uses a 1.00x NAV multiple for BTG vs. mid-tier gold producer peers' target multiples of 0.65x-1.75x due to superior free cash flow generation. That outperformance is partly offset by low production growth, BofA continued. Potential outperformance for BTG could occur, especially if the price of gold jumps, the gold mining company is acquired or unexpected exploration success occurs. I own BTG and have held onto it largely for those reasons. Chart courtesy of [www.stockcharts.com]( Investors also should be aware that downside risks remain that could prevent BTG from achieving BofA’s projected valuation. They include: 1) political risk from mining in Mali; 2) mine plan estimates in excess of BTG reserves; 3) lack of commodity diversification; 4) mine plans based on outstanding permits or approvals; 5) unfavorable changes in currencies; 6) unforeseen increases in input costs such as the price of oil and labor; 7) the possibility BTG could lose its social license to operate at any of its mines or projects; 8) potential cuts to the dividend or reduced capital return; 9) issues with the ongoing construction and ramp-up of the Goose project; 10) Uncertainty of BofA’s gold price forecasts putting its BTG valuation at risk. Six Precious Metals Stocks to Buy for Protection: Barrick Gold BofA’s price objective for Toronto, Canada-based Barrick Gold (NYSE: GOLD) is $24.00 per share and is based on the stock trading at 1.00 times the investment bank’s estimated net asset value (NAV) for the mining stock. Historically, North American precious metal stocks have traded between 1-and-3 times NAV, with unhedged, growth-oriented producers that have assets located in relatively geopolitically stable regions occupying the upper end of the range, BofA wrote. BofA further wrote that it shied away from assigning a higher target P/NAV multiple due to Barrick's stable gold output. Risks to reaching BofA’s price objective for Barrick Gold are commodity price weakness, any inability to secure financing for expansion or development projects, unforeseen operating problems, political or legal challenges in the regions in which the company operates, rising capital and operating costs and delays in the development of its growth projects. My opinion on gold is that with no end in sight for ballooning global fiscal spending and more foreign governments selling their U.S. dollars to buy more gold, gold prices should continue their upward trend, said Michelle Connell, who heads Dallas-based [Portia Capital](. Michelle Connell heads [Portia Capital](. GOLD should be a profitable way to benefit from the uptrend in the price of the precious metal, Connell told me. The mining company has strong fundamentals, a solid cash flow for the last 10 years and increasing margins, she added. GOLD holds a geographically diverse portfolio of mines across the globe, thus having lower geopolitical risk, Connell continued. However, GOLD has trailed its competitors in terms of price performance. “I would establish a partial position here and add to pullbacks,” Connell concluded. Chart courtesy of [www.stockcharts.com]( [[This A.I. Spots Trades Like a Spy, See it Live](Â]( If you want to trade smarter, not harder, and be prepared for this week's markets, you won't want to miss this. Join us live as we reveal which stocks and commodities might explode in the next few days and how to conquer volatility and avoid losses. Anticipating market changes is crucial, and nothing is more rewarding to us than helping you steer clear of potential losses. [Secure your spot now](! [Click Here...]( Six Precious Metals Stocks to Buy for Protection: Triple Flag Precious Metals The fifth dividend-paying gold stock to purchase for hedging risk is Toronto, Canada-based Triple Flag Precious Metals Corp. (NYSE: TFPM). The stock is rated as a BofA buy. BofA’s C$27.00 (US$20.00) per share price objective for TFPM is based on a target valuation multiple of 2.00x its estimated NAV for the stock. The multiple is a slight discount to senior royalty and streaming peers, giving consideration to TFPM's smaller market cap and liquidity, and less diversification by geography, commodity and operator. However, those risks are partly offset by above average margins and potential production growth. The multiple is at the high end of the range for the gold producer peers due to the attractive relative investment characteristics of the royalty & streaming business model, with accompanying precious metals exposure and insulation from inflation in operating expenditures and capital expenditures. BofA’s NAV estimate is based on a 5% real discount rate and long-term gold and silver prices of $1,850/oz and $26.00/oz, respectively (based on estimates for 2029). Risks to BofA’s price objective include 1) a lack of input the operation of portfolio assets, 2) competition from a growing royalty and streaming sector 3) precious metal price volatility, 4) asset investments in non-investment grade emerging markets, 5) concentrated ownership structure, 6) ramp-up issues at the Gunnison and Pumpkin Hollow mines. Unexpected upside for the stocks could come from: 1) higher than expected gold and silver prices, 2) future exploration discoveries and unexpected expansions at mines in the portfolio, 3) a potential acquisition of TFPM, BofA wrote. Chart courtesy of [www.stockcharts.com]( Six Precious Metals Stocks to Buy for Protection: Newmont Mining Greenwood, Village, Colorado-based Newmont Mining (NYSE: NEM) was a successful recommendation in the [Fast Money Alert]( trading service co-led by Mark Skousen, PhD, and Jim Woods. They produced a gain of nearly 19% for their [Fast Money Alert]( subscribers with a recommendation in NEM earlier in 2024. A related options recommendation produced potent returns that averaged 288.92%, after the position was sold in two parts. Citigroup rates Newmont as a buy with a target price of $57 per share due to a 1.2x price/net asset value (NAV) multiple that is in line with the investment bank’s global gold coverage. The investment firm is assuming a weighted average cost of capital (WACC) of about 5.0% and a long-term gold price of $1,600 per ounce. Despite the buy recommendation, keys risks to Citigroup’s investment thesis and valuation on NEM include commodity exposure, political risk -- particularly with its Africa operations -- and operating risk. If the impact from the risks outlined turns out to be greater or less than estimated, the shares could fail to reach or may exceed Citigroup’s target price, its equity research analysts wrote. The volatility of metals pricing factors into Citigroup's evaluation of Newmont. Gold pricing is driven by several market factors, including mining output, scrap availability, central bank sales and U.S. inflation rates, Citigroup wrote. Chart courtesy of [www.stockcharts.com]( The six precious metals stocks to buy for protection against an array of risks could be just what certain investors need to diversify their holdings and find relative safety from market freefalls. Such silver and gold stocks appear somewhat undervalued in the eyes of key market followers and could reward those willing to invest in them amid uncertainty with a hotly contested presidential election set for Nov. 5. Sincerely, Paul Dykewicz, Editor [StockInvestor.com]( About Paul Dykewicz: Paul Dykewicz is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, Seeking Alpha, GuruFocus and other publications and websites. 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