The Zacks Analyst Blog Highlights: Agnico Eagle Mines, AngloGold Ashanti, Alamos Gold, B2Gold and Barrick Gold
For immediate release
Chicago, IL - June 17, 2020 - Zacks.com announces the list of stocks on the analysts blog. Every day, Zacks Equity Research analysts discuss the latest news and events affecting stocks and the financial markets. Recent stocks featured on the blog include: Agnico Eagle Mines Ltd. AEM, AngloGold Ashanti Ltd. AU, Alamos Gold Inc.AGI, B2Gold Corp. BTG and Barrick Gold Corp. GOLD.
Here are some highlights from Tuesday's analyst blog:
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Gold should gain momentum by 2020
The global economy will continue to be affected by corona viruses in the first half of the year. Although the stock markets of most countries regained much of the ground they lost from February to March from April to May, the global economy still has a long way to go to the pre-pandemic stage. The US economy is no exception.
In the meantime, the economic devastation and the resulting market turmoil for precious metals, especially gold, have been well received. The price of the yellow metal - an important investment opportunity for safe havens - has risen by 14.3% so far this year.
Gold gained 3.2% last week when Wall Street raised concerns about a second surge in corona virus. Gold's momentum is likely to continue this year for the reasons below.
Concern about the recurrence of coronavirus cases
Investors remain very concerned about the second wave of coronavirus cases, which could significantly delay the economic reopening process that has just begun. The seven-day average of new cases in the past two weeks is still rising in more than 20 countries. States like Alaska, Arizona, Arkansas, California, Florida, North Carolina, Oklahoma and South Carolina have reported record new cases in the past three days.
Outside the United States, large Asian countries such as South Korea, Japan, China, India and Singapore reported an increase in coronavirus infections when governments tried to reopen the economy.
Gloomy global economic outlook
The main agencies, namely the World Bank, the IMF and the OECD, predict that the global economy will shrink by 5.2%, 3% and 6% in 2020 due to devastation caused by coronaviruses. The IMF said it could further lower its global growth forecast for 2020 in the next 1 to 2 months.
In addition, the National Bureau of Economic Research announced on June 8 that the U.S. economy has been in recession since mid-February, ending the longest 128 months of expansion historically.
Meanwhile, on June 9, after its two-day FOMC meeting, the Fed forecast that U.S. GDP will decrease 6.5% in 2020 before recovering to 5% in 2021. The unemployment rate will remain at 9.3% until the end of the year, much higher than 3.5% was registered shortly before the outbreak of the deadly virus.
Accommodative monetary policy
Almost all central banks have a simple monetary policy to bring more liquidity into the system. The Fed cut the key rate to zero and wanted to maintain 0% interest rate and buyback programs until 2022.
The ECB and the Bank of Japan have long had a negative interest rate policy. Lower interest rates lower the opportunity cost of holding non-profitable gold bars and make gold cheaper for investors who hold other currencies.
Our top picks
Buying pressure on gold is likely to remain robust as investors will concentrate on precious metals as a stock of assets at least in the next few months and protect themselves against market turbulence. The global economy is still not out of danger, although the pace at which the corona virus is spreading seems to be stabilizing.
At this point, it is advisable to invest in gold stocks with strong growth potential. We narrowed our search to five such stocks. Each of these stocks has either a Zacks rank of 1 (strong buy) or 2 (buy). The full list of today's Zacks # 1 Rank stocks can be found here.
Agnico Eagle Mines Ltd. deals with the exploration, development and production of mineral properties in Canada, Mexico and Finland. It mainly produces and sells gold deposits and searches for silver, zinc and copper deposits. Zacks Rank # 1 has an expected profit growth rate of 53.6% for the current year.
AngloGold Ashanti Ltd. is an independent global gold mining company with mines and exploration projects in Africa, America and Australasia. It is the third largest gold mining company in the world in terms of production. Zacks Rank # 1 expects earnings growth of 112.1% for the current year.
Alamos Gold Inc. is involved in the acquisition, exploration, development and extraction of gold in North America. Silver and precious metals are also searched for. Zacks # 2 expects earnings growth of 65% this year.
B2Gold Corp. researches and develops mineral properties for gold deposits in Nicaragua, the Philippines, Mali, Colombia, Burkina Faso and Namibia. Zacks Rank # 2 expects profit growth of 221.4% for the current year.
Barrick Gold Corp. deals with the exploration, mine development, production and sale of gold and copper properties. The company is involved in the production of gold mines in North America, South America and Africa. Zacks Rank # 2 expects profit growth of 54.9% for the current year.
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Past performance is no guarantee of future results. The loss potential is associated with every investment. This material is provided for informational purposes only, and nothing in this document constitutes investment, legal, accounting, or tax advice or a recommendation to buy, sell, or hold a security. No recommendation or advice will be given as to whether an investment for you is suitable for certain investors. It is not believed that investments in securities, companies, sectors or markets that have been identified and described have been or will be profitable. All information is current as of the date of this publication and is subject to change without notice. Any views or opinions expressed may not reflect those of the entire company. Zacks Investment Research has no investment banking, market making or asset management activities for securities. These returns come from hypothetical portfolios consisting of stocks with zacks rank = 1 and rebalanced monthly without transaction costs. These are not the returns on actual equity portfolios. The S&P 500 is an unmanaged index. At https://www.zacks.com/performance you will find information on the performance figures shown in this press release.
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Barrick Gold Corporation (GOLD): Free stock analysis report
AngloGold Ashanti Limited (AU): Free stock analysis report
Agnico Eagle Mines Limited (AEM): Free stock analysis report
B2Gold Corp (BTG): Free stock analysis report
Alamos Gold Inc. (AGI): Free stock analysis report
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