Gold stocks are starting to rebound after hitting a 30 year low, so we screened for growth plays in the sector.
Gold prices are falling again today, calling into question some analysts who argued that a rebound was all but assured given the metal's 30-year low in terms of prices. However the US dollar has performed unexpectedly well this week, and the brief rise in gold prices last week dampened some demand in Asia.
As tapering begins, the dollar will (ideally) rise relative to other currencies, and traditionally this works against gold stocks. However, since tapering was expected to begin as early as last fall, it is possible that an end to the policy has already been factored into the price of gold.
Read more: 5 Gold Stocks to Consider as Mining Companies Hope for a Rebound in 2014
So for investors who are assuming that the stock market isn't about to make record-breaking gains again in 2014, gold could become a much more desirable asset class.
We decided to find gold stocks that might be starting to rally. Gold and mining stocks often pursue other ventures, but the earnings of these stocks are still heavily tied to the price of gold worldwide. With that in mind we developed a screen on gold mining stocks looking for signs of momentum.
First, we didn't want to include penny-stocks, micro-caps, or anything priced below $5. Already this made the list rather small, as many gold stocks have lost over 50% of their value this year.
Then, to look for signs of momentum we screened for stocks that are trading above their simple moving averages for the last 20 days (MA).
These are stocks whose current price is above the average price for the stock in the last 20 days. While all of these gains are modest, below 10%, they are still a possible sign that the company is recovering. And since we also wanted to make sure that these stocks were still cheap, we further limited our list to stocks with a price-to-equity ratio below 20.
Just three gold mining stocks remained on our list.
Click on the interactive chart to view returns over time.
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Do you see investing opportunities in gold? Use the list below to begin your own analysis.
1. Alamos Gold Inc. (AGI, Earnings, Analysts, Financials):
A gold mining company, engages in the development, exploration, mining, and extraction of precious metals, primarily gold in Mexico and Turkey. Market cap at $1.54B, most recent closing price at $12.31.
Trading 0.37% above its 20 day MA.
2. Compania de Minas Buenaventura SA (BVN, Earnings, Analysts, Financials):
Engages in the exploration, mining, processing, and development of gold, silver, and other metals in Peru. Market cap at $2.88B, most recent closing price at $11.39.
Trading 2.06% above its 20 day MA.
3. New Gold, Inc. (NGD, Earnings, Analysts, Financials):
Engages in the acquisition, exploration, extraction, processing, and reclamation of mineral properties. Market cap at $2.66B, most recent closing price at $5.30.
Trading at 4.82% above its 20 day MA.
(List compiled by James Dennin. Analyst ratings sourced from Zacks Invesment Research. SMA and all other data sourced from Finviz.)
Analyze These Ideas: Getting StartedRead descriptions for all companies mentioned Access a performance overview for all stocks in the list Compare analyst ratings for the companies mentioned Compare analyst ratings to annual returns for stocks mentioned Real-Time Opinion: Scan the latest tweets about these companies (feed will open in a new window)
Dig Deeper: Access Company Snapshots, Charts, FilingsAlamos Gold Inc.(AGI, Chart, Download SEC Filings) Compania de Minas Buenaventura SA(BVN, Chart, Download SEC Filings) New Gold, Inc.(NGD, Chart, Download SEC Filings)
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