Gold Miners Trading At Bargain Price To Gold: Is GDX The Buy Opportunity For The Remainder Of 2023?
Portfolio Pulse from Piero Cingari
Gold prices underperformed in the first half of 2023, with the SPDR Gold Trust (GLD) up by 5%, compared to the SPDR S&P 500 ETF Trust (SPY) and the Invesco QQQ Trust Series 1 (QQQ) which were up by 16% and 38% respectively. However, the VanEck Gold Miners ETF (GDX) is trading at a significant discount, attracting value hunters. Large-cap gold miners included in the GDX, such as Newmont Corporation (NEM), Barrick Gold Corp. (GOLD), and Agnico Eagle Mines Limited (AEM), are showing attractive valuations according to common stock metrics.
July 03, 2023 | 8:46 pm
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POSITIVE IMPACT
Agnico Eagle Mines Limited (AEM) is trading at a 22x forward P/E ratio, well below its 5-year average of 38.9x.
The low forward P/E ratio of AEM compared to its 5-year average indicates that the stock is undervalued, which could attract investors and drive up its short-term price.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
The VanEck Gold Miners ETF (GDX) is trading at a significant discount, attracting the attention of value hunters.
The significant discount at which GDX is trading could attract value hunters, potentially driving up its short-term price.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100
POSITIVE IMPACT
Barrick Gold Corp. (GOLD) is trading at a 30% discount to the median analyst price target.
The significant discount at which GOLD is trading compared to the median analyst price target could attract investors, potentially driving up its short-term price.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
Newmont Corporation (NEM) trades at 15 times its projected 12-month earnings, showing one of the lowest forward P/E ratio of its history.
The low forward P/E ratio of NEM indicates that the stock is undervalued, which could attract investors and drive up its short-term price.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 90
NEGATIVE IMPACT
The SPDR Gold Trust (GLD) underperformed in the first half of 2023, with a gain of only 5%.
The underperformance of GLD in the first half of 2023 indicates a weak market sentiment towards gold, which could negatively impact its short-term price.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80