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Summary
- Gold prices rose sharply in 2020 as a large crowd of investors parked their funds in the safe haven asset of gold.
- But as the Canadian economy progressed on the path of recovery this year, many investors sold off their gold and returned to riskier stocks.
- Due to this selloff, many gold stocks are trading at discounted prices right now.
Gold prices rose sharply in 2020 as a large crowd of investors pulled their funds from pandemic-troubled stocks and parked them in the safe haven asset of gold. But as the Canadian economy progressed on the path of recovery this year, many investors sold off their gold and returned to riskier stocks.
Due to this selloff, many gold stocks are trading at discounted prices right now. So, let’s explore three such discounted gold stocks listed on the Toronto Stock Exchange (TSX).
Kirkland Lake Gold Ltd (TSX:KL)
Kirkland Lake is into gold exploration and mining. Macassa mine in Ontario and Fosterville mine in Australia are two of its production sites.
Kirkland’s stock has seen a fall of over eight per cent this year. But in the past one month, it has rocketed by nearly 15 per cent.
YTD chart of Kirkland Lake’s stock performance (Source: Refinitiv/Thomson Reuters)
The Canadian gold mining company reported net earnings of US$ 232.6 million and adjusted net earnings of US$ 265.8 million for the last quarter of 2020. Its full year net earnings stood at US$ 787.7 million in 2020.
Barrick Gold Corporation (TSX:ABX)
Barrick Gold has mines in multiple continents, including South America and Africa. The company has a market cap of nearly C$ 49 billion, and its price-to-book ratio is 1.673 on TMX.
While Barrick stock registers a year-to-date (YTD) decline of about five per cent, it has expanded by over nine per cent in the last one month.
Barrick Gold has committed to achieve net zero emissions by year 2050, and it has updated its 2030 reduction target to 30 per cent (base year 2018). The company has also committed to spending on socio-economic well-being of locals in mining locations in the wake of the COVID-19 pandemic.
Barrick Gold’s net earnings stood at US$ 2,324 million in 2020. Its adjusted net earnings per share amounted to US$ 1.15 last year, up 125 per cent as compared to 2019.
B2Gold Corp (TSX:BTO)
B2Gold is a gold exploration and mining company having operations in multiple countries. It has a market cap of over C$ 6.5 billion, and a price-to-earnings ratio of 9.2, as per TMX.
B2Gold stock surged by about nine per cent in the past one month and by nearly 16 per cent quarter-to-date.
YTD chart of B2Gold’s stock performance (Source: Refinitiv/Thomson Reuters)
In Q1 2021, B2Gold reported a consolidated gold revenue of US$ 362 million. For the full year of 2020, its consolidated revenue stood at US$ 1.79 billion.
In March 2021, the company reported about its ongoing discussions with the Malian government for the renewal of its Menankoto exploration permit.
The above constitutes a preliminary view and any interest in stocks should be evaluated further from investment point of view.
