In addition to providing their views regarding the price of gold (GLD) (IAU), analysts also provide their top picks to play the seasonal rally they expect for gold. Some analysts also like stocks based on their fundamentals, which could be for long-term investment purposes. In this series, we’ll take a look at those analyst picks.
CIBC and Toronto Dominion Bank
The CIBC (Canadian Imperial Bank of Commerce) recommends that investors who have gold-weighted portfolios should include Agnico Eagle Mines (AEM), Franco-Nevada (FNV), Kinross Gold (KGC), and Newmont Mining (NEM). It suggests more leveraged stocks such as Barrick Gold (ABX), Gold Fields (GFI), and Iamgold (IAG) to add more torque to portfolios. While ABX and GG have reported negative returns in 2017 due to company-specific factors, GFI and IAG are among the top five gold stocks in 2017 based on their returns. All these stocks have higher-than-average leverages to gold prices, either due to operating or financial leverage or company-specific issues.
Scotiabank and Bank of Montreal
Scotiabank believes that gold miners’ valuations on average are cheaper than gold prices. Royalty and streaming companies (GOAU) are exceptions to this. Scotiabank has Agnico Eagle Mines (AEM) and Goldcorp (GG) as its top picks for 2018. These stocks have returned 3.1% and -8.2%, respectively, year-to-date as of December 18, 2017.
The Bank of Montreal suggests that investors take a selective approach to a shotgun approach. It suggests B2Gold, Centamin, and Detour Gold.