3 Gold Stocks to Buy Now

The market correction is testing the resolve of every investor. But while many are heading for the sidelines, some investors are fleeing to the safety of gold. Gold has always been a safe harbor during times of economic volatility.

The price of physical gold (known as the spot price) as of this writing is $1,674.50 per ounce. That’s not too far away from its record high of $1,895 which was reached on September 5, 2011. At that time investors were concerned that the United States would default on its debt. This time around gold is surging on fears of a global economic slowdown largely due to the outbreak of the Covid-19 virus.

Of course for many investors, buying gold by the ounce may be impractical. One way to get exposure to the precious metal is by buying stocks in gold mining companies. In the 12 months that ended in February, the exchange-traded fund that follows the sector, the Vectors Gold Miners  ETF (NYSEARCA:GDX) has delivered a total return of 32.6%, more than double that of the S&P 500.

There are gold stocks that are appropriate for every investment style. The following three stocks provide a category leader in value, growth, or momentum.

Value Investors: Barrick Gold (GOLD)

For value investors, Barrick Gold (NYSE:GOLD) is one of the most solid stocks to own. The stock is up over 55% in the last 12 months, and is up over 10% in 2020. Barrick Gold is primarily involved in producing and selling gold and copper. The company has operations in five countries on three continents.

For value investors, the important thing to know about Barrick is they have a portfolio of high-quality (tier one) gold and copper assets. This means that GOLD stock has typically followed the spot price of gold.   

2019 was a solid year in which the company announced full-year gold production that came in at the upper end of its guidance, and copper production above guidance. A current headwind for the stock is a concern that some mining operations could be shut down due to the Covid-19 virus. However, the company is preparing contingency plans. In a press release issued by Barrick, the company cited its experience combating Ebola outbreaks around its African operations as evidence of its preparedness for any appearance of Covid-19 near its mines.

The company has also increased inventory of key commodities to help offset the potential for a global decline in commodity prices.

Growth Investors: Newmont Corporation (NEM)

Growth stocks are stocks that post-high year-over-year (YoY) earnings growth (i.e. profit). Newmont Corporation (NYSE:NEM) is up nearly 15% in 2020 and over 45% in the last 12 months. The company just posted a stellar earnings report in February which continues to position them to be a sector leader by 2025. With revenue of around $9 billion, the company is just below Barrick Gold. However, Newmont’s recent acquisition of Goldcorp is expected to vault the company ahead of Barrick who just completed its own deal with Randgold Resources. Consolidation is common in the mining industry. So asset quality is the key, and analysts are projecting that Newmont will have higher-grade ores from the mines they acquired from Goldcorp as opposed to the mines that Barrick obtained from its deal.

And for investors who place value on the company’s current reserves, NEM ended 2019 with over 100 million ounces of gold in reserve. This is over 50% more than the 65 million ounces it had on hand at the end of 2018.

Momentum Investors: Aura Minerals (ARMZF)

Momentum stocks are the stocks that have shown the greatest total return over a period of time. They tend to be more volatile than other stocks. For those investors with more risk tolerance, Aura Minerals (OTCMKTS:ARMZF) is up nearly 200% in 2020 and nearly 260% in the last 12 months.  The company operates exclusively in the Americas and recently announced its intention to purchase 279 Gold Corp. which is a wholly-owned subsidiary of Para Resources Inc. with an ownership interest in Arizona’s Gold Road Mine. Aura touts a vision they call 360° mining, in which the company looks for opportunities to be a stronger, smarter and sustainable mining company. According to the company, 360° Mining means “thinking holistically about how its business impacts and benefits every one of our stakeholders: our company, our shareholders, our employees, and the countries and communities we serve.”

Aura recently announced plans for an initial public offering and listing on the Brazilian stock exchange. Initially, these shares will only be available for institutional buyers in the United States.